Largo Resources Ltd.
TSX VENTURE : LGO

Largo Resources Ltd.

January 10, 2008 16:20 ET

Largo Receives Preliminary Indicative Terms from London-Based Investec Bank (UK) Limited to Arrange up to 75% Debt Financing for Maracas Vanadium Project (Brazil)

- Debt financing option avoids potential dilution of Shareholders' Equity at the time of a production decision - Company believes interest provides validation of Maracas' projected robust economics from a bank that is highly experienced in resource finance - Company in later stage discussions with potential offtake partners

TORONTO, ONTARIO--(Marketwire - Jan. 10, 2008) - Largo Resources Ltd. (TSX VENTURE:LGO) is pleased to announce that it has received preliminary indicative terms from Investec Bank (UK) Limited ("Investec") to arrange up to 75% of the projected capital cost of developing the Maracas vanadium project (the "Project") in Bahia, Brazil. The final nature and terms of any financing will depend on the results of due diligence and prevailing market conditions and is predicated on Aker Kvaerner's ongoing feasibility study confirming the project economics set out in last month's Scoping Study prepared by Micon International Ltd. ("Micon"). The Feasibility Study for the Maracas vanadium project is scheduled for completion by June 30, 2008.

Largo President and CEO Mark Brennan commented: "we are buoyed by Investec's expression of interest and believe it supports our view of Maracas' exciting potential as a highly robust, world-class vanadium deposit."

The scoping study prepared for Largo by Micon was previously referenced in a December 10, 2007 news release. Based on an estimated initial capital investment of US$126.2 million and the milling of 14,633,000 tonnes of open pit material at a diluted grade of 1.29 % vanadium pentoxide the project has a discounted payback period of 3 years and generates cashflows of US$683 million over an estimated production life of 26 years. This results in a pre-tax IRR of 40.7% and a pre-tax NPV of US$212 million at a discount rate of 10% per year.

Price forecasts for vanadium pentoxide were commissioned from CRU of London, England. The base case view of the CRU forecast is that the long-term price of vanadium pentoxide will stabilise at approximately $5.00 per lb. The open pit mine design was based on a pit shell reflecting this long-term price. The Measured and Indicated Mineral Resource at Maracas (Gulcari "A") at $5.00 per lb vanadium pentoxide consistent with a cut-off grade of 0.36% has been estimated by Micon to be 22.5 million tonnes grading 1.27% vanadium pentoxide, including a high-grade zone of 8.4 million tonnes grading 2.0% vanadium pentoxide. Based on this previously announced resource estimate, Gulcari "A" has 624 million lbs of contained vanadium pentoxide. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

This press release was reviewed by Andy Campbell, P.Geo., Largo's VP of Exploration, who is a Qualified Person under NI 43-101.

About Investec

Investec is an international, specialist banking group that provides a diverse range of financial products and services to a select client base. Investec Commodities and Resource Finance is a specialist mining finance team that is a recognised leader in the provision of financial solutions to the mining sector. For additional information, see their website at www.investec.com.

About Largo

Largo Resources is a Canadian natural resource development and exploration company with two advanced stage projects: the Maracas Vanadium-PGM deposit in Brazil and the Northern Dancer Tungsten-Molybdenum deposit in the Yukon. Largo also has a large (60,000 hectare) land position and prospective gold exploration properties in Ecuador. The company is listed on the TSX Venture Exchange under the symbol LGO.

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

Disclaimer

Certain statements contained in this news release may contain forward-looking information within the meaning of Canadian securities laws. Such forward-looking information is identified by words such as "estimates", "intends", "expects", "believes", "may", "will" and include, without limitation, statements regarding the company's plan of business operations, production levels and costs, estimates regarding mineral resources, projections regarding mineral prices, anticipated revenues and projected expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, risks inherent in the mining industry, financing risks, labour risks, uncertainty of mineral resource estimates, equipment and supply risks, title disputes, regulatory risks and environmental concerns. Most of these factors are outside the control of the company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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