08:06 AM EDT, 04/30/2024 (MT Newswires) -- Largo (LGO.TO) said Tuesday that it will reduce the number of contractors at its Maracas Menchen mine in Brazil by 20% in the second quarter as the company prioritizes capital expenditures for low-cost, high-return projects amid lower vanadium prices.

As part of its plan, by the end of the second quarter Largo will increase its annual crushing capacity by about 220,000 tonnes or 22%. Largo also plans to increase ilmenite production by feeding its ilmenite plant with ilmenite feedstock from its non-magnetic ponds from ores processed in prior years.

For the remainder of 2024, Largo expects to reduce its operating expenditures by BRL$48 million and slash its ilmenite capital expenditures by BRL$12 million.

"We have identified several avenues for cost reduction at the Maracas Menchen mine and we expect to realize the benefits of these initiatives in the second half of the year," said Celio Pereira, Chief Operating Officer of Largo, Brazil.

Largo reported vanadium pentoxide production of 1,729 tonnes in the first quarter, declining from 2,111 tonnes in the year-ago quarter, due to the completion of its planned kiln refractory replacement as well as annual maintenance work.

The company's share price fell 4.5% yesterday to $2.11.