ARC Funds increase position in Largo Resources Ltd. pursuant to a private placement

/FOR DISSEMINATION IN CANADA AND OVER CANADIAN NEWS SERVICES ONLY/

TORONTO, Nov. 1, 2012 /CNW/ - Arias Resource Capital Fund II L.P. ("ARCF II") and Arias Resource Capital Fund II (Mexico) L.P. ("ARCF Mexico") completed the acquisition of a total of 35,454,545 common shares ("Common Shares") of Largo Resources Ltd. ("Largo") pursuant to the private placement previously announced by Largo in a press release dated October 11, 2012 (the "Private Placement"). The Common Shares were acquired at a price of $0.22 per Common Share for aggregate consideration of $7,799,999.90.

ARCF II acquired a total of 33,550,958 Common Shares of Largo at a price of $0.22 per Common Share for consideration of $7,381,210.76.

ARCF Mexico acquired a total of 1,903,587 Common Shares of Largo at a price of $0.22 per Common Share for consideration of $418,789.14.

As a result of this acquisition, ARCF II owns an additional 33,550,958 Common Shares, representing approximately 3.86% of the total outstanding Common Shares of Largo and ARCF Mexico owns an additional 1,903,587 Common Shares, representing approximately 0.22% of the total outstanding Common Shares of Largo.

This acquisition brings ARCF II's aggregate holdings of Common Shares to 64,312,718 representing approximately 7.40% of the total outstanding Common Shares of Largo and ARCF Mexico's aggregate holding of Common Shares to 3,648,924 representing approximately 0.42% of the total outstanding Common Shares of Largo, as at October 31, 2012. Arias Resource Capital Fund L.P. ("ARCF I") was not a participant in this Private Placement, but holds 105,803,230 Common Shares in Largo, representing approximately 12.17% of the total outstanding Common Shares of Largo, as at October 31, 2012.

ARCF I, ARCF II and ARCF Mexico (collectively, the "ARC Funds") currently hold 173,764,872 Common Shares and 35,669,909 warrants in Largo expiring April 15, 2015. Each ARC Fund has agreed to not exercise any of the warrants where such exercise could result in the ARC Fund together with any affiliate becoming a new "control person" (as defined in the TSX Venture Exchanges policies) until such time as the regulatory and shareholder approvals necessary to permit such exercise are obtained. Accordingly, on an aggregate basis, assuming the exercise of the warrants currently held, the Common Shares held collectively by the ARC Funds would represent approximately 19.9% of the total outstanding Common Shares of Largo, on a partially-diluted basis.

The ARC Funds are managed by Arias Resource Capital Management LP (the "Manager").  The respective general partner of each of the ARC Funds retains the power to make investment and voting decisions in respect of the Largo securities beneficially owned by the ARC Funds.  J. Alberto Arias is the sole director of each of the general partners of the ARC Funds and indirectly controls the Manager.  As such, Mr. Arias may be deemed to share voting and dispositive power with respect to the Largo securities beneficially owned by the ARC Funds, but he disclaims any beneficial ownership of any such securities, except to the extent of his pecuniary interest therein.

The Largo securities were acquired for investment purposes. The ARC Funds may, from time to time, acquire additional securities of Largo and/or dispose of such securities as they may deem appropriate.

This news release has been disseminated in accordance with the early warning requirements of Canadian provincial securities laws.

The dissemination of this release in the United States or to any United States news service may constitute a violation of U.S. securities laws.

SOURCE: Arias Resource Capital Fund II L.P.

Alberto Arias, Director, phone: [phone] e-mail: [email protected]