Largo Inc.: Exhibit 99.1 - Filed by newsfilecorp.com

EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 Largo Inc.: Exhibit 99.1 - Filed by newsfilecorp.com

Largo Inc.

Unaudited Condensed Interim Consolidated Financial Statements

For the Three and Six Months Ended June 30, 2023 and 2022

(Expressed in thousands / 000's of U.S. dollars)

Table of Contents

Condensed Interim Consolidated Statements of Financial Position		1
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)		2
Condensed Interim Consolidated Statements of Changes in Equity		3
Condensed Interim Consolidated Statements of Cash Flows		4
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
1)	Nature of operations	5
2)	Statement of compliance	5
3)	Basis of preparation, significant accounting policies, and future accounting changes	5
4)	Amounts receivable	6
5)	Inventory	6
6)	Other intangible assets	6
7)	Mine properties, plant and equipment	7
8)	Accounts payable and accrued liabilities	8
9)	Debt	8
10)	Issued capital	9
11)	Equity reserves	10
12)	Earnings (loss) per share	11
13)	Taxes	11
14)	Related party transactions	12
15)	Segmented disclosure	12
16)	Commitments and contingencies	16
17)	Financial instruments	17
18)	Revenues	20
19)	Expenses	20

Largo Inc.

Expressed in thousands / 000's of U.S. dollars

Condensed Interim Consolidated Statements of Financial Position

			As at
			June 30,			December 31,
	Notes		2023			2022
Assets
Cash		$	63,980		$	54,471
Restricted cash			734			470
Amounts receivable	4		23,984			20,975
Inventory	5		63,164			64,221
Prepaid expenses			8,466			14,007
Total Current Assets			160,328			154,144
Other intangible assets	6		6,749			7,263
Mine properties, plant and equipment	7		199,701			175,237
Vanadium assets			24,400			14,510
Deferred income tax asset	13(b)		2,141			4,596
Total Non-current Assets			232,991			201,606
Total Assets		$	393,319		$	355,750
Liabilities
Current portion of lease liability		$	590		$	581
Accounts payable and accrued liabilities	8		28,539			26,634
Deferred revenue			3,138			1,698
Debt	9		18,000			4,000
Current portion of provisions			6,914			6,060
Total Current Liabilities			57,181			38,973
Lease liability			1,205			1,473
Non-current accounts payable and accrued liabilities	8		250			326
Long term debt	9		47,000			36,000
Provisions			5,414			4,424
Deferred income tax liability	13(b)		713			-
Total Non-current Liabilities			54,582			42,223
Total Liabilities			111,763			81,196
Equity
Issued capital	10		412,324			411,646
Equity reserves	11		11,974			14,138
Accumulated other comprehensive loss			(97,061	)		(112,165	)
Deficit			(54,671	)		(48,227	)
Equity attributable to owners of the Company			272,566			265,392
Non-controlling Interest			8,990			9,162
Total Equity			281,556			274,554
Total Liabilities and Equity		$	393,319		$	355,750
Commitments and contingencies	7, 16

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 1

--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

			Three Months ended						Six Months ended
			June 30,						June 30,
	Notes		2023			2022			2023			2022
Revenues	18	$	53,110		$	84,804		$	110,531		$	127,492
Expenses
Operating costs	19		(43,029	)		(50,704	)		(88,960	)		(79,662	)
Professional, consulting and management fees			(5,824	)		(6,380	)		(11,363	)		(12,296	)
Foreign exchange (loss) gain			(817	)		2,410			(400	)		943
Other general and administrative expenses			(3,333	)		(5,102	)		(6,606	)		(6,757	)
Share-based payments	11		(413	)		(491	)		929			(1,301	)
Finance costs	19		(1,981	)		(314	)		(3,407	)		(491	)
Interest income			480			213			1,192			397
Technology start-up costs			(1,539	)		(1,847	)		(4,308	)		(4,817	)
Exploration and evaluation costs			(1,301	)		(180	)		(1,540	)		(285	)
			(57,757	)		(62,395	)		(114,463	)		(104,269	)
Net income (loss) before tax		$	(4,647	)	$	22,409		$	(3,932	)	$	23,223
Income tax recovery (expense)	13(a)		295			(7,115	)		(38	)		(7,717	)
Deferred income tax (expense) recovery	13(a)		(1,614	)		2,671			(3,203	)		505
Net income (loss)		$	(5,966	)	$	17,965		$	(7,173	)	$	16,011

Other comprehensive income (loss)
Items that subsequently will be reclassified to operations:
Unrealized gain (loss) on foreign currency
translation			10,223			(19,319	)		15,104			7,293
Comprehensive income (loss)		$	4,257		$	(1,354	)	$	7,931		$	23,304
Net income (loss) attributable to:
Owners of the Company		$	(5,763	)	$	18,140		$	(7,001	)	$	16,291
Non-controlling interests		$	(203	)	$	(175	)	$	(172	)	$	(280	)
		$	(5,966	)	$	17,965		$	(7,173	)	$	16,011
Comprehensive income (loss) attributable to:
Owners of the Company		$	4,460		$	(1,176	)	$	8,103		$	23,584
Non-controlling interests		$	(203	)	$	(178	)	$	(172	)	$	(280	)
		$	4,257		$	(1,354	)	$	7,931		$	23,304
Basic earnings (loss) per Common Share	12	$	(0.09	)	$	0.28		$	(0.11	)	$	0.25
Diluted earnings (loss) per Common Share	12	$	(0.09	)	$	0.28		$	(0.11	)	$	0.25
Weighted Average Number of Shares Outstanding (in 000's)
- Basic	12		64,045			64,824			64,025			64,786
- Diluted	12		64,045			65,133			64,025			65,208

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 2

--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares

Condensed Interim Consolidated Statements of Changes in Equity

				Attributable to owners of the Company
				Issued			Equity			Accumulated Other						Non-controlling			Shareholders'
	Shares			Capital			Reserves			Comprehensive Loss			Deficit			interest			Equity

Balance at December 31, 2021	64,727		$	415,982		$	17,814		$	(118,772	)	$	(49,327	)	$	-		$	265,697
Share-based payments	-			-			1,301			-			-			-			1,301
Exercise of warrants	10			124			(34	)		-			-			-			90
Exercise of stock options	18			162			(68	)		-			-			-			94
Exercise of restricted share units	81			1,263			(1,263	)		-			-			-			-
Share repurchase	(25	)		(323	)		-			-			-			-			(323	)
Sale of non-controlling interest	-			-			-			-			-			250			250
Currency translation adjustment	-			-			-			7,293			-			-			7,293
Net income (loss) for the period	-			-			-			-			16,291			(280	)		16,011
Balance at June 30, 2022	64,811		$	417,208		$	17,750		$	(111,479	)	$	(33,036	)	$	(30	)	$	290,413

Balance at December 31, 2022	64,006		$	411,646		$	14,138		$	(112,165	)	$	(48,227	)	$	9,162		$	274,554
Share-based payments	-			-			(1,408	)		-			479			-			(929	)
Exercise of restricted share units	44			678			(678	)		-			-			-			-
Expiry of warrants	-			-			(78	)		-			78			-			-
Currency translation adjustment	-			-			-			15,104			-			-			15,104
Net loss for the period	-			-			-			-			(7,001	)		(172	)		(7,173	)
Balance at June 30, 2023	64,050		$	412,324		$	11,974		$	(97,061	)	$	(54,671	)	$	8,990		$	281,556

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 3

--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars

Condensed Interim Consolidated Statements of Cash Flows

			Three Months ended						Six Months ended
			June 30,						June 30,
	Notes		2023			2022			2023			2022
Operating Activities
Net income (loss) for the period		$	(5,966	)	$	17,965		$	(7,173	)	$	16,011
Adjustment for Non-cash Items
Depreciation			7,005			5,972			15,049			10,695
Share-based payments	11		413			491			(929	)		1,301
Unrealized foreign exchange loss (gain)			245			(2,455	)		264			(3,044	)
Finance costs	19		1,981			314			3,407			491
Interest income			(480	)		(213	)		(1,192	)		(397	)
Income tax (recovery) expense	13(a)		(295	)		7,115			38			7,717
Deferred income tax expense (recovery)	13(a)		1,614			(2,671	)		3,203			(505	)
Income tax paid			(676	)		(1,118	)		(676	)		(1,118	)
Cash Provided Before Working Capital Items			3,841			25,400			11,991			31,151
Change in amounts receivable			10,507			(10,319	)		(2,016	)		(9,933	)
Change in inventory			(3,868	)		(8,692	)		2,930			(20,991	)
Change in prepaid expenses			1,669			(4,758	)		6,081			(4,012	)
Changes in accounts payable and accrued
liabilities and provisions			5,036			5,816			2,584			5,582
Change in deferred revenue			872			(4,545	)		1,440			(2,945	)
Net Cash Provided by (Used in) Operating Activities			18,057			2,902			23,010			(1,148	)
Financing Activities
Receipt of debt	9		-			15,000			25,000			15,000
Repayment of debt	9		-			(15,000	)		-			(15,000	)
Interest paid			(2,092	)		-			(2,092	)		-
Interest received			479			213			1,191			397
Lease payments			(143	)		(139	)		(286	)		(278	)
Change in restricted cash			-			(15,524	)		(264	)		(15,524	)
Sale of non-controlling interest			-			-			-			250
Share repurchase	10		-			(323	)		-			(323	)
Issuance of common shares	11		-			94			-			184
Net Cash (Used in) Provided by Financing Activities			(1,756	)		(15,679	)		23,549			(15,294	)
Investing Activities
Intangible assets			(104	)		(716	)		(194	)		(1,689	)
Mine properties, plant and equipment			(12,654	)		(10,667	)		(27,380	)		(13,962	)
Vanadium assets			(1,525	)		-			(10,115	)		-
Net Cash Used in Investing Activities			(14,283	)		(11,383	)		(37,689	)		(15,651	)
Effect of foreign exchange on cash			387			(1,356	)		639			1,181
Net Change in Cash			2,405			(25,516	)		9,509			(30,912	)
Cash position - beginning of the period			61,575			78,394			54,471			83,790
Cash Position - end of the period		$	63,980		$	52,878		$	63,980		$	52,878

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 4

--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

1) Nature of operations

Largo Inc. ("the Company") is a producer and supplier of high-quality vanadium products, which are sourced from one of the world's highest-grade vanadium deposits at the Company's Maracás Menchen Mine located in Brazil. The Company is also focused on the advancement of renewable energy storage solutions through Largo Clean Energy and its vanadium redox flow battery technology ("VRFB"), as well as providing investors with exposure to physical vanadium through Largo Physical Vanadium Corp. ("LPV"). In addition to advancing its US- based clean energy storage business, the Company is in the process of implementing an ilmenite concentration plant using feedstock from its existing operations. While the Company's Maracás Menchen Mine has reached commercial production, future changes in market conditions and feasibility estimates could result in the Company's mineral resources not being economically recoverable.

The Company is a corporation governed by the Business Corporations Act (Ontario) and domiciled in Canada whose shares are listed on the Toronto Stock Exchange ("TSX") and on the Nasdaq Stock Market ("Nasdaq"). The head office, principal address and records office of the Company are located at 55 University Avenue, Suite 1105, Toronto, Ontario, Canada M5J 2H7.

2) Statement of compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting.

The unaudited condensed interim consolidated financial statements were approved by the Board of Directors of the Company on August 8, 2023.

3) Basis of preparation, significant accounting policies, and future accounting changes

The basis of presentation, and accounting policies and methods of their application in these unaudited condensed interim consolidated financial statements, including comparatives, are consistent with those used in the Company's audited annual consolidated financial statements for the year ended December 31, 2022 and should be read in conjunction with those statements.

These unaudited condensed interim consolidated financial statements are presented in thousands of U.S. dollars, unless otherwise noted. References to the symbol "C$" or "CAD" mean the Canadian dollar, references to the symbol "EUR" mean the Euro and references to the symbol "R$" or "BRL" mean the Brazilian real, the official currency of Brazil.

a) Critical judgements and estimation uncertainties

The preparation of unaudited condensed interim consolidated financial statements requires the Company's management to make judgments, estimates and assumptions about the carrying amount of its assets and liabilities that are not readily apparent from other sources. These estimates and assumptions are disclosed in note 3(d) of the Company's audited annual consolidated financial statements for the year ended December 31, 2022. There have been no significant changes to the areas of estimation and judgment during the three and six months ended June 30, 2023.

b) Significant accounting policies

These unaudited condensed interim consolidated financial statements, including comparatives, have been prepared following the same accounting policies and methods of computation as the audited annual consolidated financial statements for the year ended December 31, 2022.

Amendments to IAS 1, Presentation of Financial Statements, IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors and IAS 12, Income Taxes, became effective on January 1, 2023 with no impact on the Company's unaudited condensed interim consolidated financial statements.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 5

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

4) Amounts receivable

		June 30,		December 31,
		2023		2022
Trade receivables	$	20,320	$	18,285
Current taxes recoverable - Brazil		2,401		2,156
Current taxes recoverable - Other		1,235		506
Other receivables		28		28
Total	$	23,984	$	20,975

5) Inventory

		June 30,		December 31,
		2023		2022
Finished products	$	44,711	$	48,546
Work-in-process		558		998
Stockpiles		1,234		284
Warehouse materials		16,661		14,393
Total	$	63,164	$	64,221

During the three and six months ended June 30, 2023, the Company recognized a net realizable value write- down of $nil and $107 for battery components (three and six months ended June 30, 2022 - $nil and $nil), with the write-down included in technology start-up costs. The value of battery components inventory at June 30, 2023 and December 31, 2022 was $nil. During the three and six months ended June 30, 2023, the Company recognized a net realizable value write-down of $683 and $683 for finished products (three and six months ended June 30, 2022 - $2,285 and $2,285). As inventory is sold, previously recorded net realizable value write- downs are reclassified from inventory write-down to direct mine and production costs or product acquisition costs as appropriate (note 19).

6) Other intangible assets

At June 30, 2023, the remaining estimated useful life of patents held by the Company was 7.5 years (December 31, 2022 - 8 years). At June 30, 2023, the remaining estimated useful life of capitalized software costs was 4.5 years (December 31, 2022 - 5 years).

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 6

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

		Intellectual
		Property		Software		Total
Cost
Balance at December 31, 2021	$	4,366	$	-	$	4,366
Additions		-		4,041		4,041
Balance at December 31, 2022	$	4,366	$	4,041	$	8,407
Additions		-		118		118
Balance at June 30, 2023	$	4,366	$	4,159	$	8,525
Accumulated Depreciation
Balance at December 31, 2021	$	437	$	-	$	437
Depreciation		436		271		707
Balance at December 31, 2022	$	873	$	271	$	1,144
Depreciation		218		414		632
Balance at June 30, 2023	$	1,091	$	685	$	1,776
Net Book Value
At December 31, 2022	$	3,493	$	3,770	$	7,263
At June 30, 2023	$	3,275	$	3,474	$	6,749

7) Mine properties, plant and equipment

At June 30, 2023 and December 31, 2022, the Company's economic interest in the Maracás Menchen Mine totaled 99.94%. The remaining 0.06% economic interest is held by Companhia Baiana de Pesquisa Mineral ("CBPM") owned by the state of Bahia. CBPM retains a 3% net smelter royalty ("NSR") in the Maracás Menchen Mine. The property is also subject to a royalty of 2% on certain operating costs under the Brazilian Mining Act. Under a separate agreement, Anglo Pacific Plc receives a 2% NSR in the Maracás Menchen Mine.

		Office and							Buildings,
		Computer					Mine		Plant and			Construction
		Equipment			Vehicles		Properties		Equipment			In Progress			Total
Cost
Balance at December 31, 2021	$	3,968		$	243	$	94,477	$	163,234		$	5,113		$	267,035
Additions		2,530			61		7,147		6,788			27,575			44,101
Disposals		(152	)		-		-		(4,205	)		-			(4,357	)
Reclassifications		-			-		-		3,523			(3,523	)		-
Effects of changes in foreign exchange rates		42			17		4,831		10,963			259			16,112
Balance at December 31, 2022	$	6,388		$	321	$	106,455	$	180,303		$	29,424		$	322,891
Additions		144			-		12,203		157			12,788			25,292
Reclassifications		-			-		-		14			(14	)		-
Effects of changes in foreign exchange rates		56			26		7,405		14,354			3,227			25,068
Balance at June 30, 2023	$	6,588		$	347	$	126,063	$	194,828		$	45,425		$	373,251

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 7

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

		Office and							Buildings,
		Computer					Mine		Plant and			Construction
		Equipment			Vehicles		Properties		Equipment			In Progress		Total
Accumulated Depreciation
Balance at December 31, 2021	$	508		$	243	$	32,450	$	87,175		$	-	$	120,376
Depreciation		1,198			5		4,701		18,270			-		24,174
Disposals		(152	)		-		-		(4,205	)		-		(4,357	)
Effects of changes in foreign exchange rates		21			17		1,595		5,828			-		7,461
Balance at December 31, 2022	$	1,575		$	265	$	38,746	$	107,068		$	-	$	147,654
Depreciation		605			6		3,674		9,702			-		13,987

Effects of changes in foreign exchange rates		38			22		2,607		9,242			-		11,909
Balance at June 30, 2023	$	2,218		$	293	$	45,027	$	126,012		$	-	$	173,550

Net Book Value
At December 31, 2022	$	4,813		$	56	$	67,709	$	73,235		$	29,424	$	175,237
At June 30, 2023	$	4,370		$	54	$	81,036	$	68,816			4$5,425	$	199,701

Of the additions noted above, $25,205 related to the Mine Properties segment (year ended December 31, 2022 − $36,556) and $85 related to Largo Clean Energy (year ended December 31, 2022 − $3,599).

8) Accounts payable and accrued liabilities

		June 30,		December 31,
		2023		2022
Accounts payable	$	22,518	$	20,459
Accrued liabilities		4,554		3,122
Accrued financial costs		948		287
Other taxes		769		3,092
Total	$	28,789	$	26,960

Current	$	28,539	$	26,634
Non-current		250		326
Total	$	28,789	$	26,960

9) Debt

		June 30,		December 31,
		2023		2022
Total debt	$	65,000	$	40,000

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 8

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

				Cash flows
		December 31,							June 30,
		2022		Proceeds		Repayment			2023
Total debt	$	40,000	$	25,000	$	-		$	65,000
Total liabilities from financing activities	$	40,000	$	25,000	$	-		$	65,000

				Cash flows
		December 31,							December 31,
		2021		Proceeds		Repayment			2022
Total debt	$	15,000	$	55,000	$	(30,000	)	$	40,000

Credit facilities

In April 2022, the Company repaid in full its $15,000 working capital facility. At the same time, the Company secured a new working capital facility with a bank in Brazil. This facility was fully drawn down and proceeds of $15,000 were received. This facility was originally due to be repaid as a lump sum payment in April 2023, together with accrued interest at a rate of 3.65% per annum. The facility was repaid in full in December 2022.

In October 2022, the Company secured an additional debt facility of $20,000 with a bank in Brazil. Following an amendment finalized in June 2023, the facility is for three years, with the principal due for repayment at maturity. In addition to a fee of 0.8%, accrued interest at a rate of 8.51% p.a. is to be paid every six months.

In December 2022, the Company secured an additional debt facility of $20,000 with a bank in Brazil. The facility is for three years, with equal principal repayments due semi-annually after a grace period of 360 days. In addition to a fee of 0.70%, accrued interest at a rate of 8.20% p.a. is to be paid every six months.

In January 2023, the Company secured a two-year debt facility of $15,000, bearing interest at 6.85% per annum. 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% per annum and an initial fee of 0.80%. The principal is due for repayment at maturity, with interest payments due semi-annually.

10) Issued capital

a) Authorized

Unlimited common shares without par value.

b) Issued

	Six months ended			Year ended
	June 30, 2023			December 31, 2022
	Number of			Number of
	Shares		Cost	Shares			Cost
Balance, beginning of the period	64,006	$	411,646	64,727		$	415,982
Exercise of warrants (note 11)	-		-	10			124
Exercise of stock options (note 11)	-		-	36			320
Exercise of restricted share units (note 11)	44		678	106			1,308
Share repurchase	-		-	(873	)		(6,088	)
Balance, end of the period	64,050	$	412,324	64,006		$	411,646

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 9

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

11) Equity reserves

	RSUs					Options							Warrants
								Weighted							Weighted
								average							average
								exercise							exercise						Total
	Number			Value		Number		price			Value		Number		price			Value			value
December 31, 2021	216		$	1,551		889		C$12.78		$	4,857		1,832		C$11.78		$	11,406		$	17,814
Share-based payments	-			564		-		-			1,714		-		-			-			2,278
Granted	111			640		363		11.79			359		-		-			-			999
Exercised	(123	)		(1,308	)	(36	)	(6.70	)		(133	)	(10	)	(11.50	)		(34	)		(1,475	)
Expired	-			-		-		-			-		(1,480	)	-			(4,573	)		(4,573	)
Forfeited	(4	)		(7	)	(208	)	(13.23	)		(898	)	-		-			-			(905	)
December 31, 2022	200		$	1,440		1,008		C$12.55		$	5,899		342		C$13.00		$	6,799		$	14,138
Share-based payments	-			333		-		-			276		-		-			-			609
Granted	230			132		424		6.60			201		-		-			-			333
Exercised	(62	)		(678	)	-		-			-		-		-			-			(678	)
Forfeited	(85	)		(694	)	(407	)	(12.18	)		(1,656	)	(14	)	-			(78	)		(2,428	)
June 30, 2023	283		$	533		1,025		C$10.23		$	4,720		328		C$13.00		$	6,721		$	11,974

During the three and six months ended June 30, 2023, the Company recognized a share-based payment expense related to the grant, vesting and forfeiture of stock options and RSUs of $413 and a recovery of $929 (three and six months ended June 30, 2022 - expenses of $491 and $1,301) for stock options and RSUs granted to the Company's directors, officers, employees and consultants. The total share-based payment expense was charged to operations.

a) RSUs

During the three and six months ended June 30, 2023, the Company granted 230 RSUs to officers and employees of the Company. These RSUs vest over time, with one-third vesting during each of the years 2024, 2025 and 2026.

b) Stock options

			Weighted		Weighted		Weighted
			average		average		average
	No.	No.	remaining		exercise		grant date
Range of prices	outstanding	exercisable	life (years)		price		share price
C$ 5.71 - 10.00	742	332	4.0	C$	6.70	C$	C$6.70
15.01 - 20.00	222	141	3.3		17.33		17.33
20.01 - 25.00	29	29	0.1		24.00		24.00
30.01 - 30.40	32	32	0.5		30.40		30.40
	1,025	534		C$	C$10.23

During the six months ended June 30, 2023, the Company granted 424 (year ended December 31, 2022 - 363) stock options with a weighted average exercise price of C$6.60. The chart below details the inputs to the Black-Scholes model used in determining the fair value of the options granted during the year (with 0% dividend yield and 0% expected forfeiture rate).

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 10

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

		Six months ended
		June 30, 2023						June 30, 2022
Risk-free interest rate		3.13%		3.04%		3.29%		1.62%		0.95%
Expected volatility		68.58%		68.25%		68.48%		75.50%		81.13%
Expected life of options		5		5		5		5		5
Fair value on grant date	$	4.75	$	3.92	$	3.38	$	6.93	$	12.58
Exercise price	$	8.04	$	6.67	$	5.71	$	11.22	$	19.52
Number of options granted (000)		34		313		77		54		176
Expiry		01/12/28		04/13/28		05/18/28		01/20/27		04/01/27

Options vest in equal installments of one-third on the anniversary date of the grant. The remaining weighted average contractual life of options outstanding at June 30, 2023 was 3.6 years (December 31, 2022 - 2.7 years).

c) Warrants

							Expected	Risk-free
No.	No.	Grant	Expiry	Exercise	Expected	Expected	dividend	Interest
outstanding	exercisable	Date	Date	price	volatility	life (years)	yield	rate
328	328	12/07/20	12/08/25	C$ 13.00	88%	5.00	0%	0%
328	328			C$ 13.00

12) Earnings (loss) per share

The total number of shares issuable from options, warrants and RSUs that are excluded from the computation of diluted earnings (loss) per share because their effect would be anti-dilutive was 1,636 and 1,636 for the three and six months ended June 30, 2023 (three and six months ended June 30, 2022 - 1,004 and 1,004).

13) Taxes

a) Tax expense

		Three months ended						Six months ended
		June 30,			June 30,			June 30,			June 30,
		2023			2022			2023			2022
Income tax recovery (expense)	$	295		$	(7,115	)	$	(38	)	$	(7,717	)
Deferred income tax (expense) recovery		(1,614	)		2,671			(3,203	)		505
Total	$	(1,319	)	$	(4,444	)	$	(3,241	)	$	(7,212	)

b) Changes in deferred tax assets and liabilities

		June 30,			December 31,
		2023			2022
Deferred income tax asset	$	2,141		$	4,596
Deferred income tax liability		(713	)		-
Net deferred income tax asset	$	1,428		$	4,596

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 11

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

		Six months
		ended			Year ended
		June 30,			December 31,
		2023			2022
Net deferred income tax asset, beginning of the period	$	4,596		$	3,343
Deferred income tax (expense) recovery		(3,203	)		1,423
Effect of foreign exchange		35			(170	)
Net deferred income tax asset, end of the period	$	1,428		$	4,596

14) Related party transactions

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.

The remuneration of directors and other members of key management personnel during the period was as follows:

		Three months ended				Six months ended
		June 30,		June 30,		June 30,		June 30,
		2023		2022		2023		2022
Short-term benefits	$	370	$	1,889	$	1,460	$	2,523
Share-based payments		151		578		280		1,261
Total	$	521	$	2,467	$	1,740	$	3,784

Refer to note 16 for additional commitments with management.

15) Segmented disclosure

The Company has six operating segments: sales & trading, mine properties, corporate, exploration and evaluation properties ("E&E properties") (included as part of inter-segment transactions & other), Largo Clean Energy and Largo Physical Vanadium. Corporate includes the corporate team that provides administrative, technical, financial and other support to all of the Company's business units, as well as being part of the Company's sales structure.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 12

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

																	Inter-
											Largo			Largo			segment
		Sales &			Mine						Clean			Physical			transactions
		trading			properties			Corporate			Energy			Vanadium			& other			Total
Three months ended June 30, 2023
Revenues	$	43,810		$	43,940		$	35,737		$	-		$	-		$	(70,377	)	$	53,110

Operating costs		(50,806	)		(36,952	)		(34,492	)		-			-			79,221			(43,029	)
Professional, consulting and management fees		(456	)		(624	)		(1,997	)		(2,444	)		(303	)		-			(5,824	)
Foreign exchange gain (loss)		9			(453	)		(381	)		(13	)		21			-			(817	)
Other general and administrative expenses		(452	)		(545	)		(880	)		(1,253	)		(29	)		(174	) ¹		(3,333	)
Share-based payments		-			-			(413	)		-			-			-			(413	)
Finance costs		(10	)		(1,662	)		(3	)		(18	)		(286	)		(2	) ¹		(1,981	)
Interest income		1			141			338			-			-			-			480
Technology start-up costs		-			-			-			(1,539	)		-			-	¹		(1,539	)
Exploration and evaluation costs		-			(625	)		-			-			-			(676	) ²		(1,301	)
		(51,714	)		(40,720	)		(37,828	)		(5,267	)		(597	)		78,369			(57,757	)
Net income (loss)
before tax		(7,904	)		3,220			(2,091	)		(5,267	)		(597	)		7,992			(4,647	)
Income tax recovery		228			67			-			-			-			-			295
Deferred income tax (expense) recovery		237			(1,675	)		(176	)		-			-			-			(1,614	)
Net income (loss)	$	(7,439	)	$	1,612		$	(2,267	)	$	(5,267	)	$	(597	)	$	7,992		$	(5,966	)
Revenues (after elimination of inter-segment transactions)	$	43,721		$	8,974		$	415		$	-		$	-					$	53,110
At June 30, 2023
Total non-current assets	$	1,697		$	171,774		$	19,437		$	10,621		$	25,234		$	4,228		$	232,991
Total assets	$	64,169		$	291,507		$	99,227		$	15,255		$	26,437		$	(103,276	)³	$	393,319
Total liabilities	$	42,142		$	101,877		$	70,082		$	6,204		$	228		$	(108,770	)⁴	$	111,763

1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

2. Amount relating to E&E properties.

3. Inter-segment transaction elimination of $107,548 partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total assets of $4,270 and E&E properties total assets of $2.

4. Inter-segment transaction elimination of $108,853 partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total liabilities of $83 and E&E properties total liabilities of $nil.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 13

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

																	Inter-
											Largo			Largo			segment
		Sales &			Mine						Clean			Physical			transactions
		trading			properties			Corporate			Energy			Vanadium			& other			Total
Three months ended June 30, 2022

Revenues	$	74,471		$	66,027		$	57,922		$	-		$	-		$	(113,616	)	$	84,804

Operating costs		(61,844	)		(42,319	)		(55,776	)		-			-			109,235			(50,704	)
Professional, consulting and management fees		(568	)		(1,567	)		(1,584	)		(2,337	)		(324	)		-	¹		(6,380	)
Foreign exchange (loss) gain		(57	)		2,651			(202	)		1			17			-			2,410
Other general and administrative expenses		(137	)		(3,051	)		(390	)		(1,354	)		(41	)		(129	) ¹		(5,102	)
Share-based payments		-			-			(491	)		-			-			-			(491	)
Finance costs		(8	)		(264	)		(3	)		(21	)		(1	)		(17	) ¹		(314	)
Interest income		-			153			60			-			-			-			213
Technology start-up costs		-			-			-			(1,730	)		-			(117	) ¹		(1,847	)
Exploration and evaluation costs		-			(178	)		-			-			-			(2	) ²		(180	)
		(62,614	)		(44,575	)		(58,386	)		(5,441	)		(349	)		108,970			(62,395	)
Net income (loss) before tax		11,857			21,452			(464	)		(5,441	)		(349	)		(4,646	)		22,409
Income tax expense		(810	)		(6,305	)		-			-			-			-			(7,115	)
Deferred income tax recovery (expense)		(340	)		3,435			(424	)		-			-			-			2,671
Net income (loss)	$	10,707		$	18,582		$	(888	)	$	(5,441	)	$	(349	)	$	(4,646	)	$	17,965
Revenues (after elimination of inter-segment transactions)	$	74,471		$	10,333		$	-		$	-		$	-		$	-		$	84,804
At December 31, 2022
Total non-current assets	$	934		$	148,508		$	20,525		$	12,389		$	15,344		$	3,906		$	201,606
Total assets	$	73,874		$	250,926		$	90,770		$	15,941		$	27,086		$	(102,847	)³	$	355,750
Total liabilities	$	56,566		$	72,842		$	53,373		$	5,092		$	374		$	(107,051	)⁴	$	81,196

1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

2. Amount relating to E&E properties.

3. Inter-segment transaction elimination of $(106,773) partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total assets of $3,924 and E&E properties total assets of $2.

4. Inter-segment transaction elimination of $(107,225) partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total liabilities of $174.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 14

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

																	Inter-
											Largo			Largo			segment
		Sales &			Mine						Clean			Physical			transactions
		trading			properties			Corporate			Energy			Vanadium			& other			Total
Six months ended June 30, 2023
Revenues	$	94,244		$	82,522		$	74,508		$	-		$	-		$	(140,743	)	$	110,531
Operating costs		(98,733	)		(71,141	)		(72,148	)		-			-			153,062			(88,960	)
Professional, consulting and management fees		(902	)		(1,468	)		(3,684	)		(4,846	)		(463	)		-			(11,363	)
Foreign exchange gain (loss)		63			(201	)		(294	)		(22	)		54			-			(400	)
Other general and administrative expenses		(625	)		(973	)		(2,096	)		(2,685	)		51			(278	) ¹		(6,606	)
Share-based payments		-			-			929			-			-			-			929
Finance costs		(19	)		(3,059	)		(7	)		(32	)		(287	)		(3	) ¹		(3,407	)
Interest income		2			658			532			-			-			-			1,192
Technology start-up costs		-			-			-			(4,307	)		-			(1	) ¹		(4,308	)
Exploration and evaluation costs		-			(862	)		-			-			-			(678	) ²		(1,540	)
		(100,214	)		(77,046	)		(76,768	)		(11,892	)		(645	)		152,102			(114,463	)
Net income (loss) before tax		(5,970	)		5,476			(2,260	)		(11,892	)		(645	)		11,359			(3,932	)
Income tax expense		(38	)		-			-			-			-			-			(38	)
Deferred income tax (expense) recovery		80			(2,731	)		(552	)		-			-			-			(3,203	)
Net income (loss)	$	(5,928	)	$	2,745		$	(2,812	)	$	(11,892	)	$	(645	)	$	11,359		$	(7,173	)
Revenues (after inter-segment eliminations)	$	92,578		$	16,049		$	1,904		$	-		$	-		$	-		$	110,531

1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

2. Amount relating to E&E properties.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 15

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

																	Inter-
											Largo			Largo			segment
		Sales &			Mine						Clean			Physical			transactions
		trading			properties			Corporate			Energy			Vanadium			& other			Total
Six months ended June 30, 2022

Revenues	$	108,621		$	102,893		$	88,950		$	-		$	-		$	(172,972	)	$	127,492

Operating costs		(93,792	)		(69,132	)		(85,667	)		-			-			168,929			(79,662	)
Professional, consulting and management fees		(1,061	)		(2,603	)		(3,474	)		(4,650	)		(508	)		-			(12,296	)
Foreign exchange (loss) gain		(83	)		944			78			(2	)		6			-			943
Other general and administrative expenses		(248	)		(3,318	)		(808	)		(2,197	)		(56	)		(130	) ¹		(6,757	)
Share-based payments		-			-			(1,301	)		-			-			-			(1,301	)
Finance costs		(14	)		(413	)		(6	)		(39	)		(1	)		(18	) ¹		(491	)
Interest income		-			297			100			-			-			-			397
Technology start-up costs		-			-			-			(4,566	)		-			(251	) ¹		(4,817	)
Exploration and evaluation costs		-			(281	)		-			-			-			(4	) ²		(285	)
		(95,198	)		(74,506	)		(91,078	)		(11,454	)		(559	)		168,526			(104,269	)
Net income (loss) before tax		13,423			28,387			(2,128	)		(11,454	)		(559	)		(4,446	)		23,223
Income tax expense		(956	)		(6,761	)		-			-			-			-			(7,717	)
Deferred income tax recovery (expense)		(387	)		1,587			(695	)		-			-			-			505
Net income (loss)	$	12,080		$	23,213		$	(2,823	)	$	(11,454	)	$	(559	)	$	(4,446	)	$	16,011
Revenues (after inter-segment eliminations)	$	108,621		$	18,557		$	314		$	-		$	-		$	-		$	127,492

1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

2. Amount relating to E&E properties.

16) Commitments and contingencies

At June 30, 2023, the Company was party to certain management and consulting contracts. Minimum commitments under the agreements are approximately $1,808 and all payable within one year. These contracts also require that additional payments of up to approximately $2,712 be made upon the occurrence of certain events such as change of control. As the triggering event has not occurred, the contingent payments have not been reflected in these consolidated financial statements.

In 2021, the Company signed a 10-year exclusive off-take agreement with a third party for the purchase of all standard and high purity grade vanadium products they produce. The annual quantity to be delivered to the Company in 2023 is 220 tonnes of V₂O₅, with the Company having a right of first refusal over additional amounts.

The Company is committed to the purchase of 60 tonnes per month of V₂O₅from third parties for the remainder of 2023.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 16

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

The Company's Largo Clean Energy business is required to pay a royalty of $120 per kilowatt capacity of a licensed product until such time as the licensed patents expire or are abandoned, and $60 per kilowatt thereafter. Refer to note 7 for details of the royalties payable at the Maracás Menchen Mine.

The Company is committed to a minimum amount of rental payments under five leases of office space which expire between December 31, 2023 and May 1, 2027. Minimum rental commitments remaining under the leases are approximately $299, including $185 due within one year.

At the Company's Maracás Menchen Mine and at Largo Clean Energy, the Company has entered into purchase order contracts with remaining amounts due related to goods not received or services not rendered as of June 30, 2023 of $9,315.

The Company, through its subsidiaries, is party to legal proceedings in the ordinary course of its operations related to legally binding agreements with various third parties under supply contracts and consulting agreements. During the year ended December 31, 2022, the Company received a ruling regarding one such proceeding in Brazil. This relates to a supply agreement for the Maracás Menchen Mine which was filed with the courts in October 2014. The ruling requires the Company to pay amounts due, plus interest and legal fees. At June 30, 2023, the Company recognized a provision of R$28,244 ($5,861) in the current portion of provisions (December 31, 2022 - $5,076). The Company is awaiting a further ruling from a higher court in Brazil.

The Company and its subsidiaries are party to legal proceedings regarding labour matters. A provision was recorded at December 31, 2022 for such proceedings in Brazil in an amount of R$1,223 ($234). At June 30, 2023, the provision recognized was R$1,223 ($254).

The outcome of these proceedings remains dependent on the final judgment. Management does not expect the outcome of any of the remaining proceedings to have a materially adverse effect on the results of the Company's financial position or results of operations.

17) Financial instruments

Financial assets and financial liabilities at June 30, 2023 and December 31, 2022 were as follows:

		June 30,		December 31,
		2023		2022
Cash	$	63,980	$	54,471
Restricted cash		734		470
Trade and other receivables		20,348		18,313
Accounts payable and accrued liabilities (including non-current)		28,789		26,960
Total debt		65,000		40,000

Restricted cash refers to cash amounts the Company was required to place on deposit. Refer to the liquidity risk discussion below regarding liabilities.

The Company's risk exposures and the impact on the Company's financial instruments are summarized below. There have been no changes in the risks, objectives, policies and procedures from the previous year.

a) Fair value

IFRS requires that the Company disclose information about the fair value of its financial assets and liabilities. Fair value estimates are made based on relevant market information and information about the financial instrument.

These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 17

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

The fair value hierarchy categorizes into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly such as those derived from prices.

• Level 3 inputs are unobservable inputs for the asset or liability.

The carrying amounts for trade receivables, amounts receivable and accounts payable and accrued liabilities in the condensed interim consolidated statements of financial position approximate fair values because of the limited term of these instruments. Cash and restricted cash are classified as FVTPL and included in level 1. The debt facilities were secured at interest rates consistent with the rates seen at June 30, 2023 and thus the carrying amount of debt approximates fair value.

There have been no changes in the classification of financial instruments in the fair value hierarchy since December 31, 2022. The Company does not have any financial instruments measured using Level 3 inputs. The Company does not offset financial assets with financial liabilities and there were no transfers between Level 1 and Level 2 input financial instruments.

b) Credit risk

The Company's maximum amount of credit risk is attributable to cash, restricted cash and amounts receivable.

The Company minimizes its credit risk with respect to cash by placing its funds on deposit with the highest rated banks in Canada, Ireland, the U.S. and Brazil. Financial instruments included in amounts receivable consist primarily of receivables from unrelated companies. Sales to customers outside of Brazil are protected either by the Company's credit insurance policies, which establishes credit limits for each customer, or by the Company requiring letters of credit or up-front payment prior to delivery occurring.

Of the total trade receivables balance of $20,320, $11,468 relates to customers in Brazil, which are not covered by the Company's credit insurance policies. The ratings for these companies range from AA to AAA. The Company applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables.

To measure expected credit losses, trade receivables are grouped based on risk characteristics and due dates. At June 30, 2023, no amounts are past due and in the six months ended June 30, 2023, the Company has not experienced any credit losses. At June 30, 2023, the loss allowance for trade receivables was determined to be $nil (December 31, 2022 - $nil), with any movement recognized as a component of finance costs (note 19). There have been no write offs of trade receivables.

c) Liquidity risk

The following table details the Company's expected remaining contractual cash flow requirements at June 30, 2023 for its financial liabilities with agreed repayment periods.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 18

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

		Less than		6 months
		6 months		to 1 year		1 to 3 years		Over 3 years
Accounts payable and accrued liabilities (note 8)	$	28,504	$	-	$	285	$	-
Debt (note 9)		-		18,000		47,000		-
Operating and purchase commitments		10,312		997		80		33
Total	$	38,816	$	18,997	$	47,365	$	33

The Company's principal sources of liquidity are its cash flows from operating activities and cash of $63,980 (December 31, 2022 - $54,471). Refer to note 16 for other commitments and contingencies.

d) Market risk

Interest rate risk

The Company's interest rate exposure is limited to that portion of its debt that is subject to floating interest rates. At June 30, 2023, the Company had no debt that is subject to floating interest rates and does not have any exposure to floating interest rates.

Foreign currency risk

At June 30, 2023, the Company's outstanding debt is 100% denominated in U.S. dollars (December 31, 2022 - 100% U.S. dollar denominated).

The impact of fluctuations in foreign currency on cash and debt relates primarily to fluctuations between the U.S. dollar, the Canadian dollar, the Brazilian real and the Euro. At June 30, 2023, the Company's U.S. dollar functional currency entities had cash denominated in Canadian dollars, Euros and Swiss francs and the Company's Brazilian real functional currency entities had cash and debt denominated in U.S. dollars.

A 5% change in the value of the Canadian dollar, the Euro and the Swiss franc relative to the U.S. dollar would affect the value of these cash balances at June 30, 2023 by approximately $178. A 5% change in the value of the Brazilian real relative to the U.S. dollar would affect the value of Brazilian real cash balances by approximately $291.

Price risk

The Company does not have any financial instruments with significant exposure to price risk.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 19

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

18) Revenues

		Three months ended				Six months ended
		June 30,		June 30,		June 30,		June 30,
		2023		2022		2023		2022
V₂O₅revenues
Produced products	$	30,558	$	45,976	$	65,084	$	67,790
Purchased products		2,937		1,143		5,465		1,529
		33,495		47,119		70,549		69,319
V₂O₃revenues
Produced products	$	2,358	$	-	$	3,841	$	-
Purchased products		-		-		1,155		-
		2,358		-		4,996		-
FeV revenues
Produced products	$	17,230	$	22,883	$	34,658	$	41,911
Purchased products		27		14,802		328		16,262
		17,257		37,685		34,986		58,173

Vanadium sales from contracts with customers	$	53,110	$	84,804	$	110,531	$	127,492

19) Expenses

		Three months ended				Six months ended
		June 30,		June 30,		June 30,		June 30,
		2023		2022		2023		2022
Finance costs:
Interest expense and fees	$	1,674	$	237	$	3,025	$	354
Interest on lease liabilities		14		35		28		53
Accretion		68		42		129		84
Write-down of vanadium assets		225		-		225		-
	$	1,981	$	314	$	3,407	$	491
Operating costs:
Direct mine and production costs	$	24,976	$	23,905	$	53,395	$	41,465
Conversion costs		2,220		2,337		4,138		4,184
Product acquisition costs		3,753		9,568		7,931		11,118
Royalties		2,450		3,742		4,895		5,768
Distribution costs		2,525		2,851		3,972		4,306
Inventory write-down (note 5)		683		2,572		683		2,572
Depreciation and amortization		6,202		5,507		13,453		9,812
Iron ore costs		220		222		493		437
	$	43,029	$	50,704	$	88,960	$	79,662

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 20