Largo Resources Ltd.
TSX VENTURE : LGO

Largo Resources Ltd.

December 04, 2009 07:30 ET

Largo Resources Provides Corporate Update to Shareholders

LARGO CONFERENCE CALL SET FOR TUESDAY DECEMBER 8TH Highlights - Largo considering numerous options relating to the financing of its Maracas Vanadium Project - New tungsten acquisition to provide short term production opportunity - Largo conference call set for Tuesday December 8th at 11:00 am EST to update shareholders regarding the status of their projects and current activities.

TORONTO, ONTARIO--(Marketwire - Dec. 4, 2009) - Largo Resources Ltd. ("Largo") (TSX VENTURE:LGO) is pleased to provide a corporate update on its activities including the Maracas Vanadium Project in Bahia State, Brazil, the Northern Dancer Tungsten-Molybdenum project in the Yukon Territory, Canada, and the new acquisition of tungsten assets in Currais Novos, Rio Grande de Norte, Brazil.

Largo continues to work towards its objective to be the leading global mining company for the production of vanadium and tungsten.

Conference Call Details:

A conference call for investors and analysts will be held Tuesday December 8th, at 11:00 a.m. Eastern Standard Time.

To participate in the conference call please dial, (416) 340-2216 in Toronto, or Toll free, 1-866-226-1792. Callers should request the Largo conference call.

Vanadium Assets

Maracas

The Maracas project, located in Bahia, Brazil, remains Largo's lead and most advanced stage project. The highlights and most significant aspects are:



- Maracas is the highest grade vanadium deposit in the world. Largo has an
estimated NI 43-101 compliant measured and indicated resource of 22.5
million tonnes grading 1.26% V2O5, which is two to three times higher
grade than any other producer and/or project (See press release dated
August 13, 2008 for details regarding mineral resource estimate);
- Very significant high-grade zone consisting of 8.7 million tonnes grading
1.94% V2O5;
- A positive Definitive Feasibility Study (DFS) (see press release dated
August 12, 2008) outlining:
-- NI 43-101 proven & probable reserve estimated at 13.1 million tonnes
grading 1.34% V2O5 (See press release dated August 12, 2008 for details
of reserve estimate)
-- Open pit operation to produce approximately 4,500 tonnes of vanadium per
year for the first 8 years of full production
-- Producing 155 million lbs of vanadium contained in FeV over the life of
the project
-- Payback in 1.9 years
-- 23 year project plan
- An off-take agreement with Glencore International is in place. The
agreement is a take or pay for all of the production at the mine gate for
six years with an option for an additional six years;
- Localization License (LL), the most key environmental licence, granted in
May 2009 (see press release May 14, 2009) and water permits are also
in place.


Largo believes that there is good potential to expand the mineral resource significantly with drilling along strike and at depth. The existing resource occupies a small foot print and Largo has done additional work including drilling outside the resource area on the property and has identified a number of targets that can be upgraded through drilling to identify additional resources. Only 10% of the potential 8 kilometres of strike length has been tested to date and four other targets have been identified that need further drilling to upgrade them to a resource category.

In Brazil, Largo's engineering staff has continued to develop the project by:



- Identifying an operating scenario whereby the nominal production rate is
increased to 5,000 tpa of vanadium from the DFS rate of 4,500 tpa
- Focusing on updating operating and capital costs
- Initiating additional environmental work in support of the project prior
to commencing basic engineering
- Preparing to conduct additional site geotechnical investigations for basic
engineering
- Identifying additional metallurgical testwork to maximise recoveries and
examine throughput alternatives.


On the financing side, Largo has been in discussion with a number of financial institutions, end users and other partners, and is considering different alternatives to finance the project. Project finance is the last hurdle before construction and ultimate production for the project. Largo anticipates that the time line between obtaining project finance and commencing production is approximately 24 months.

Campo Alegre de Loudres

The recent acquisition of Campo Alegre de Loudres in Bahia, Brazil provides Largo with an additional high grade Fe-Ti-V deposit estimated to be 132 million tonnes of 0.75% V205 and includes 50% Fe and 21% TiO2. This estimate is historical in nature, does not comply with National Instrument 43-101 and should not be relied upon. The resource estimate was prepared by Companhia Baiana de Pesquisa Mineral (CBPM) in 1980. The geological setting and style of mineralization at Campo Alegre de Lourdes is very similar to that of Maracas. The mineralization occurs as wide zones of massive titanomagnetite and ilmenite that has been traced for eleven kilometres along strike and two kilometres wide and is characterized by eleven deposits aligned roughly north-south as eleven elongated hills.

Drilling at Campo Alegre de Lourdes has not tested the limits of the deposit and it remains open both along its 22 kilometre strike and to depth. The holes have only tested the deposit to a very shallow depth of 60 metres vertical. Largo believes that Campo Alegre provides the Company with an opportunity to diversify into the iron ore business with the potential benefit of producing titanium and vanadium as by-products.

One of the initial steps in the development of Campo Alegre de Lourdes will be to establish a NI 43-101 compliant mineral resource, which would form the basis for a future NI 43-101 complaint Preliminary Economic Assessment (PEA). Largo is planning an initial exploration program to verify these resources and believes that there is potential to increase the estimated resources significantly. The program would consist of line cutting, ground magnetic survey, sampling and geological mapping. The core and geological database from previous drill programs is intact and in good condition and is housed in an indoor core facility. It is also planned to move this core to Largo's core facility at the Maracas field office where it will be re-logged, sampled and put into a GEMCOM database. Largo expects that this will allow verification to proceed expeditiously.

Tungsten Assets

Northern Dancer

On the bases of the revised mineral resource for Northern Dancer (see press release dated March 12, 2009) and the conceptual potential to mine higher than average grade material for the initial years of mine life, Largo is analyzing target production rates in excess of 21 million pounds of tungsten and 6 million pounds of molybdenum per year. Also, additional metallurgical testwork is being done to further advance development of this project.

Largo has previously announced (see press release dated March 12, 2009) updated mineral resource estimates at its Northern Dancer project that included an estimate of measured mineral resources of 30.8 million tonnes grading 0.114% WO3 and 0.030% Mo, indicated mineral resources of 192.6 million tonnes grading 0.100% WO3 and 0.029% Mo, and inferred mineral resources of 201.2 million tonnes grading 0.089% WO3 and 0.024% Mo. The higher-grade zone at the Northern Dancer project is estimated to contain a measured and indicated resource of 60.3 million tonnes grading 0.137% WO3 and 0.045% Mo (WO3 equiv 0.215%) and an inferred mineral resource of 5.4 million tonnes grading 0.134% WO3 and 0.047% Mo (WO3 equiv 0.214%).

Largo has carried out some very preliminary mine planning exercises that project that the first eight years of production has the potential to yield tungsten grades of approaching 0.1% and molybdenum grades of 0.03%. Largo has engaged Inspectorate-PRA to carry out a further phase of metallurgical testing that started in September and is expected to be complete by the end of January 2010. This testwork is being carried out on new metallurgical composite samples that represent the first 5-6 years of production. The program is designed to identify the optimal flowsheet that will likely combine gravity and flotation techniques, and also to predict overall recoveries. In addition to the work being carried out by Inspectorate-PRA, a further program of optical sorting will be carried out to confirm the previous results that indicated the technique to be successful in recovering 93% of the WO3 while rejecting approximately 48% of the feed.

Currais Novos Tungsten Project

The Currais Novos Tungsten Project is the latest acquisition opportunity for Largo. The project, which is located near Currais Novos, 160 kilometres west-southwest of Natal in the State of Rio Grande do Norte, Northeastern Brazil, is expected to provide near term production of tungsten and molybdenum. The project is situated in a known tungsten region in Brazil that has had production from a number of small mines since the early 1940's. The project envisions the initial reprocessing and recovery of tungsten and molybdenum from two tailings piles deposited during the processing of ore from two of the nearby tungsten mines (Barra Verde and Boca de Laje) that have operated intermittently since the early 1940's. The potential for an underground operation will be evaluated separately after the tailings operation has been established. This acquisition is part of Largo's overall tungsten strategy of achieving near term production, generating positive cash flows, and establishing operating expertise, prior to developing the Northern Dancer Project which will provide a stable, long-term supply of tungsten and molybdenum.

About Largo

Largo Resources Ltd. 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. 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

This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the development potential and timetable of the Largo's projects; Largo's ability to raise additional funds necessary to complete projects; future mineral prices; 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; costs of production; 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".
Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining are based on assumptions underlying mineral reserve and mineral resource estimates and the realization of such estimates; detailed research and analysis completed by independent consultants; research and analysis regarding the timing of delivery for long-lead items; knowledge regarding the factors involved in building mines and other factors described in the technical reports that Largo has filed under the profile of the Company on SEDAR. Capital and operating cost estimates are based on extensive research of the Largo and independent consultants, recent estimates of construction and mining costs and other factors that are set out in the technical reports. Production estimates are based on mine plans and production schedules, which have been developed by the Largo's personnel and independent consultants. 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 risks related to: unexpected events and delays during construction, expansion and start-up; variations in ore grade and recovery rates; receipt and revocation of government approvals; timing and availability of external financing on acceptable terms; actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of ferrovanadium; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Although management of the 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. The Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

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