TSX Shariah screener · September 2026

Is Largo Inc. (LGO) Halal?

FAIL

Largo Inc. · TSX: LGO / Nasdaq: LGO · Materials

The short answer

Largo Inc. (TSX: LGO; Nasdaq: LGO) is a FAIL. The business gate passes: primary vanadium production (Maracás Menchen Mine, Brazil) is a permissible activity. The income gate passes: interest income is effectively US$0 (≈0% of revenue). But the debt gate fails decisively: total debt of US$114.2M at June 30, 2026 converts to ≈C$162.2M, about 224.7% of the ~C$72.2M market cap — far over the ~33% guideline. Cash of US$5.5M is ≈10.8% of market cap and passes.

Gate 1 — Business activity: PASS

Largo Inc. is the world's largest primary vanadium producer, operating the Maracás Menchen Mine in Brazil. It sells vanadium products (VPURE/VPURE+ flakes, powder, ferrovanadium, vanadium carbon nitride) into steel, aerospace, defense, chemical and energy-storage markets, holds a 37.4% stake in Storion Energy (a vanadium flow-battery electrolyte joint venture with Stryten Energy), owns tungsten assets in Yukon (Northern Dancer) and Brazil (Currais Novos), and started copper-PGM by-product concentrate production in August 2026. Mining and selling vanadium — a raw material — is a permissible business activity (supplying materials to defense/aerospace customers is not weapons manufacturing); no prohibited segments. Gate 1 passes.

Gate 2 — Debt and cash: FAIL

Total debt was US$114.249M at June 30, 2026 (Note 10 of the Q2 2026 interim financial statements), all of it classified as current (maturing within 12 months) → about C$162.2M at US$1 = C$1.42 → ≈224.7% of the ~C$72.2M market cap (C$0.70, September 30, 2026; 103.134M shares) — far over the ~33% guideline and AAOIFI's 30% threshold. An August 2026 term sheet with five Brazilian lenders restructures about US$82.2M of this debt to March 2030 (definitive agreements on ~48% executed per the September 23, 2026 update), extending maturities but not reducing the amount. Cash: US$5.103M unrestricted + US$0.382M restricted = US$5.485M → ≈C$7.8M → ≈10.8% of market cap — passes. The debt component fails, so Gate 2 fails. Context: the company reported a working-capital deficit of US$79.269M and management disclosed material uncertainty about its ability to continue as a going concern; the TSX lifted its remedial delisting review on August 26, 2026.

Gate 3 — Non-compliant income: PASS

The income statement's “Interest (expense) income” line is negative in both periods — US$(24K) in Q2 and US$(16K) for the first half of 2026 — i.e. a net interest expense, and the cash flow statement shows US$(16K) of interest received/(paid) in H1. No separate positive interest income is disclosed; interest income is effectively ≈US$0, ≈0% of H1 revenue of US$71.528M — well under the ~5% tolerance. Gate 3 passes.

Key figures used

Q2 2026 revenue US$43.999M (+68.5% YoY); H1 2026 US$71.528M (reported ~August 14, 2026).
Total debt US$114.249M at June 30, 2026, all classified current (Note 10).
Cash US$5.103M + restricted cash US$0.382M = US$5.485M.
Market cap ≈C$72.19M (C$0.70 per share, September 30, 2026; 103.134M shares).
Debt ≈ 224.7% of market cap (US$114.249M × 1.42 ÷ C$72.19M) — far over the ~33% guideline.
Cash ≈ 10.8% of market cap; interest income ≈ US$0 (≈0% of revenue).
Working-capital deficit US$79.269M; management disclosed material uncertainty on going concern. Aug 2026: term sheet to restructure ~US$82.2M of bank debt to March 2030.

Frequently asked questions

Is Largo (LGO) halal?

Our September 2026 screen gives Largo (LGO) a FAIL. The vanadium mining business is permissible, and cash (about 10.8% of market cap) and interest income (effectively zero) both pass their gates. But total debt of US$114.2M converts to roughly C$162.2M - about 224.7% of the ~C$72.2M market cap - far over the ~33% guideline for interest-bearing debt.

What business is Largo in?

Largo is the world's largest primary vanadium producer, operating the Maracás Menchen Mine in Brazil and selling vanadium products (flakes, powder, ferrovanadium, vanadium carbon nitride) into steel, aerospace, defense, chemical and energy-storage markets. It also holds a 37.4% stake in Storion Energy (a vanadium flow-battery electrolyte joint venture with Stryten Energy), tungsten assets in Yukon and Brazil, and started copper-PGM by-product concentrate production in August 2026. It trades on both the TSX and Nasdaq as LGO.

Why does Largo fail the debt gate?

At June 30, 2026 Largo carried total debt of US$114.249M (Note 10 of the Q2 2026 interim financial statements) - all of it classified as current, maturing within 12 months. Against a market cap of about C$72.2M (C$0.70 per share on September 30, 2026, with 103.134M shares outstanding), the debt is about 224.7% of market cap (converted at US$1 = C$1.42) - far over the ~33% guideline and AAOIFI's 30% threshold. An August 2026 term sheet with five Brazilian lenders restructures about US$82.2M of the debt to March 2030, which extends maturities but does not reduce the amount owed.

How much interest income does Largo earn?

Effectively none. The income statement's 'Interest (expense) income' line is negative in both periods - US$(24K) in Q2 and US$(16K) for the first half of 2026 - meaning net interest expense, not income, and the cash flow statement shows US$(16K) of interest received/(paid) in H1. Interest income is effectively US$0, about 0% of H1 revenue of US$71.528M - well under the ~5% tolerance.

What do Musaffa, Zoya or ShariaPortfolio say about Largo?

No Musaffa page was found for LGO or LGO.TO, no public Zoya rating was found, and ShariaPortfolio does not publish per-stock screening pages. This page's FAIL result is based on the debt-to-market-cap ratio from the company's own interim financial statements.

Sources

Screened 2026-09-30 from published company figures and market data. Figures change; this page is educational, not financial advice and not a religious ruling.