08:12 AM EST, 12/19/2024 (MT Newswires) -- Largo (LGO.TO) said Thursday that it signed definitive agreements with Stryten Energy to establish a joint venture focused on becoming a domestic producer of vanadium electrolyte.

The Storion Energy joint venture plans to develop vanadium flow battery components for use in the energy storage market.

Under the terms, Stryten will pay US$1 million in cash to Largo and contribute a total of US$6 million to Storion.

Upon closing, Largo and Stryten will each hold a 50% equity interest in Storion.

"The transaction aims to maximize the value of Largo's vanadium products, and Storion's patented purification process, which is expected to accelerate the manufacture of vanadium electrolyte and deployment of vanadium flow battery solutions, which in turn is anticipated to increase the demand for vanadium from Largo Physical Vanadium, Largo and the vanadium sector as a whole," said Francesco D'Alessio, Largo's chief commercial officer.

Largo's share price dropped 5.5% on Wednesday to $2.39 on the TSX.