S&P rates Largo Resources B-, notes B

S&P said it assigned its B- preliminary long-term corporate credit rating to Largo Resources Ltd.

The outlook is stable.

At the same time, the agency assigned its B preliminary issue-level rating and 2 preliminary recovery rating to the company's proposed $150 million senior secured notes.

The 2 recovery rating reflects an expectation of substantial (70%-90%; rounded estimate 75%) recovery in the event of default.

“The rating on Largo primarily reflects the company's limited operating breadth as a single-asset producer of vanadium, with all output generated from Largo's Maracas Menchen mine in Brazil,” S&P said in a news release.

“We also incorporate the risks associated with Largo's relatively short operating track record, which reduces visibility on the sustainability of the company's cost profile.”

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