Largo announces results of Life-of-Mine Study for its Maracás Menchen Mine and resulting significant increase in NPV

TORONTO, Oct. 26, 2017 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQB: LGORF) is pleased to announce the results of an independent National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") Technical Report (the "Technical Report"), containing a Life of Mine Plan ("LOMP") for its Maracás Menchen vanadium mine in Bahia, Brazil (the "Maracás Menchen Mine"), a Feasibility Study (the "FS") for Campbell Pit at the Maracás Menchen Mine and, a Preliminary Economic Assessment (the "PEA") for Gulçari A Norte, Gulçari B, Novo Amparo, Novo Amparo Norte, Campbell in pit resources and São José satellite deposits at the Maracás Menchen Mine (the "Satellite Deposits").

Largo retained GE21 Consultoria Mineral Ltda. ("GE21") to prepare the Technical Report and it will be filed on SEDAR within the required 45-day period.

Highlights of the Technical Report:

• NPV_(8%) post tax is US$ 542 million for the reserves at the Campbell Pit, representing an increase of approximately 195% over the NPV reported for Reserves in Largo's Updated Mine Plan And Mineral Reserve Report filed on July 8, 2016¹.
  
  
• NPV_(8%) post tax is US$ 140 million for the mineral resources in the Satellite Deposits.
  
  
• Life of operation for the reserves in the Campbell Pit is 11 years.
  
  
• An additional mine life of 12 years was estimated, if the Inferred Resources in the Satellite Deposits come to be converted to Mineral Reserves. 
  
  
• The Technical Report is a "Vanadium Only" study. No value was given for any by-products at this time, including iron, ilmenite ("TiO2") and PGMs.
  
  
• The Technical Report used a long-term vanadium pentoxide ("V2O5") price of US$ 6.34/lb for the life of mine except for the years 2018 and 2019, where vanadium pentoxide price of US$ 9.00/lb was used.
  
  
• The LOMP results indicate an operating life of the Maracás Menchen Mine, including the Satellite Deposits, to be of 23 years.
  
  
• The Technical Report contemplates two expansions to increase production at Campbell Pit as follows: in 2019-960 tonnes/month (11,520 tpa) and in 2020-1100 tonnes/month (13,200 tpa).

The reserves in the Campbell Pit were estimated as follows:

Maracás Vanadium Project Mineral Reserves – Campbell Pit Block dimensions 5x5x5 (m) Mine Recovery 100% - Dilution 5% (Effective Date - May 02, 2017)
Reserve Category	Tonnage (kt)	%V2O5 Head	%Magnetics	%V2O5 concentrate
Proven	17,570	1.14	29.66	3.21
Probable	1,440	1.26	33.89	3.20
Total in pit Reserve	19,010	1.13	29.30	3.22

• The mineral resources, estimated under the PEA was as follows:

Satellites Deposits Mine Recovery 100% - Dilution 5%
Target	ROM			Magnetic Concentrate
	Tonnage	V2O5 Head	SiO2 Head	Mag*	Tonnage	V2O5	SiO2
	Kt	%		%	Kt	%
Gulçari A Norte e Gulçari B	7,851	0.67	26.82	25.7	2,014	2.63	2.97
Novo Amparo	1,171	0.71	14.18	38.9	456	1.58	1.44
Novo Amparo Norte	9,473	0.81	23.66	28.6	2,714	2.60	2.79
São José	3,860	0.85	23.35	28.8	1,113	2.67	2.29
Campbell inferred	1,736	1.03	28.88	28.2	489	3.06	3.96
Total	24,090	0.78	24.55	28.2	6,785	2.60	2.79

*Numbers are rounded to one decimal place.

• GE21 recommended the Satellite Deposits be developed sequentially as follows: Novo Amparo Norte, Gulçari A Norte & Gulçari B, Sao Jose, Campbell in pit resources and Novo Amparo.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the results of the PEA will be realized. 

Overview of the Technical Report:

Largo has completed construction, development and ramping up to name plate capacity (9,600 tonnes V₂O₅/year) at its Maracás Menchen Mine.

The Technical Report was prepared by GE21 and was designed to allow the Company to more fully optimize operations in order to maximize the Maracás Menchen Mine's NPV and is based on the production of V₂O₅ from the Maracás Menchen Mine's mineral resources as well as from its established mineral reserves. The PEA examines the incremental impact to the mine plan of mining the Satellite Deposits not previously considered.  The report does not provide any credit for by-products, however Largo will continue to evaluate the technical and economic viability of all potential by-products.

The Technical Report respects the definition of PEA as described in the CSA Staff Notice 43-307- Mining Technical Report – Preliminary Economic Assessments, issued by the Canadian Securities Administrators on Aug 16, 2012.

Mr. Smith, Largo's CEO stated "I am very pleased with the results of this study.  Both the increase in the net present value of our operations and the greatly increased mine life that could be achieved as a result of the Satellite Deposits speak to what I view as a very bright future for Largo.  This Technical Report further reinforces that Largo has a world class vanadium operation and I am confident that our team will continue to meet and exceed our operational expectations."

Qualified Persons

Porfírio Cabaleiro Rodriguez, Mining Engineer, BSc (Mine Eng), MAIG employed by GE21 Consultoria Mineral Ltda, Leonardo Apparicio da Silva, Mining Engineer, BSc (Min Eng), MSc (Met Eng), MAIG associated to GE21 Consultoria Mineral Ltda, and Fabio Valerio Xavier, Geologist,BSc , Geol, MAIG associated to GE21 Consultoria Mineral Ltda, are the Qualified Persons as defined in NI 43-101 responsible for the Technical Report and are all independent of the Company.

Quality Assurance Quality Control:

The scientific and technical information in this press release has been reviewed and approved by Porfírio Cabaleiro Rodriguez, Mining Engineer, BSc (Mine Eng), MAIG, GE21 director; Leonardo Apparicio da Silva, Mining Engineer, BSc (Min Eng), MSc (Met Eng), MAIG; and Fabio Valerio Xavier, Geologist,BSc , Geol, MAIG,both employed by GE21 Consultoria Mineral Ltda, all of whom are Qualified Persons as defined in NI 43-101.

About Largo Resources Ltd.

Largo is a growing strategic mineral company focused on the production of vanadium pentoxide at its Vanadio de Maracás Menchen Mine. Largo also has interests in a portfolio of other projects, including: a 100% interest in the Currais Novos Tungsten Tailings Project in Brazil; a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project in Brazil; and a 100% interest in the Northern Dancer Tungsten-Molybdenum property in the Yukon Territory, Canada.

Vanadium is primarily used as an alloy to strengthen steel and reduce its weight. Vanadium enhanced steels are used in a vast and growing range of products that are used and encountered every day; including, rebar, automobiles, transport infrastructure etc. With consumption increasing at a compound annual growth rate of over 8% for the past several years (Roskill, 2015), vanadium is a bourgeoning commodity which lacks opportunities for investment in the wider market place. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to continue this growth over the medium and long term.

Largo is listed on the Toronto Stock Exchange under the symbol "LGO".

For more information please refer to Largo's website: www.largoresources.com

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About GE21

GE21 is a specialized and independent mineral consulting firm based on a multi-disciplinary technical team, which offers services covering most project development stages in the mining sector.

The senior staff and Board of Directors have extensive technical and operational experience, based on collaboration with relevant companies in the fields of exploration and mineral consulting in Brazil going back to the 1980's.

GE21's services cover the entire mining cycle, from business strategies and target generation and investments to mine closure. GE21 routinely provides services for mineral exploration, project development, geological valuations, and resource and reserve estimation and certification according to international standards, including JORC and NI 43- 101.  In addition, GE21 also serves the mining industry by working with operators in connection with mine planning and mine optimization, technical and economic studies as well as technical audits and the application of best market practices advocated by various international codes.

Cautionary Notes:

This press release contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to; the future price of vanadium, tungsten and molybdenum; the estimation of mineral reserves and mineral resources; conclusions of economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on SEDAR from time to time.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo's annual and interim MD&As.

NEITHER THE TORONTO STOCK EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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1} The increase in NPV is largely the result of the increase in V205 prices and the effect of the expansion projects contemplated by the Technical Report.

SOURCE Largo Resources Ltd.

Largo Investor Relations, [email protected]

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