Largo Resources Ltd.

Largo Resources Ltd.

April 10, 2006 16:08 ET

Largo Announces Option to Acquire World Class Tungsten-Molybdenum Porphry Deposit in the Yukon

TORONTO, ONTARIO--(CCNMatthews - April 10, 2006) -

Historical Resource Of 162 Million Tonnes Grading 0.13% Tungsten and 0.052% Molybdenum (Non 43-101 Compliant)

Largo Continues Strategy to Focus on Late Stage Mining Opportunities as Well as Exploration in the America's

Largo Resources Ltd. (TSX VENTURE:LGO) is pleased to announce that it has acquired optional rights to acquire up to a 100 percent working interest in the Northern Dancer tungsten-molybdenum project that straddles the Yukon-British Columbia border, 290 kilometers east of Whitehorse, that comprises approximately 1500 hectares.

The Northern Dancer property (formerly known as the Logtung property), hosts widespread tungsten and molybdenum mineralization, the core of which was partially delineated by 51 diamond drill holes and 496 metres of underground workings completed by AMAX Minerals Exploration between 1977 and 1980. This core area, which was known as the Logtung Deposit, is still partially open to extension laterally and to depth, and has a published resource of 162 million tonnes grading 0.13% WO3 and 0.052% MoS2 (Economic Geology, 1984, vol.79, p.849; this resource is an historical estimate that does not conform to standards prescribed in National Instrument 43-101). Investors are cautioned not to rely on this estimate.

Based on criteria designed to estimate the relative size of metal deposits (Economic Geology, 1999, vol.94, pp.455-473), Northern Dancer's estimated metal content ranks it as a giant tungsten deposit and as a large molybdenum deposit. The mineralization is mostly contained in fractures and veins cutting intrusive dykes and adjacent thermally metamorphosed sedimentary rocks. The deposit is classified as porphyry type and will be explored as an open pit target.

The Northern Dancer project consists of 23 mineral claims in Yukon and three mineral tenures in BC, with a combined surface area of about 1500 hectares. The main exploration area is accessible via an extensive system of roads and trails that are connected to the Alaska Highway by a 12 km long trunk road. This trunk road is currently being cleared of snow in preparation for camp construction.

Largo's President and CEO Mark Brennan stated, "We are excited to have acquired this advanced project and are optimistic that with additional evaluation there is potential to increase the existing known grade, mineralization and ability to "high grade" an initial production scenario." He continued, "Largo will attempt to aggressively work the project to determine whether a production scenario is feasible in the short-term."

A 20 hole, 4800 meter diamond drill program is scheduled to begin imminently. The drill program has been designed to: 1) twin selected old drill holes to determine statistical reliability of the existing assay data; 2) fill some gaps in the drill pattern; 3) test potential for areas of higher than deposit average grade mineralization; and, 4) determine whether grades will increase if improved core recovery results from the application of modern drill technology. The purpose of the program is to provide drill data that can be used to estimate a NI 43-101 compliant mineral resource.

The drill program will be managed by Archer, Cathro & Associates (1981) Limited under supervision of William A. Wengzynowski, P.Eng, who is the qualified person for this news release.

To acquire the property, Largo must make a cash payment of $75,000 upon execution of a transfer agreement. Under the assumed agreement, in order to earn a 70% interest in the property, Largo must: (1) spend a total of CDN$5.0 million in exploration over three years, with CDN$1.5 million to be spent by the first year anniversary of the agreement and the balance to be spent by the third year anniversary of the agreement; (2) issue 2,000,000 common shares upon execution of the agreement; (3) issue 1,000,000 common shares upon the 12 month anniversary of the agreement; and (4) issue 1,000,000 common shares upon the 24 month anniversary of the agreement. Within 12 months of earning the 70% interest, Largo would have the right to earn the remaining 30% interest by making a cash payment of CDN$5,000,000 or the issuance of the equivalent value of CDN$5,000,000 worth of shares, based on Largo's average closing price for the previous 20 trading days. The property would be subject to 3% net smelter return royalty, 2% of which may be acquired by Largo. The transfer and assumption of the agreement by Largo (including the issuance of any shares) remains subject to regulatory approval.

About Largo

Largo Resources Ltd. is a Canadian listed mineral resource exploration and development company. The Company is focused upon creating shareholder value through developing exploration properties and acquiring undervalued mining assets throughout the America's. Largo has an option to acquire and is aggressively exploring the 65,000 hectare Macuchi Gold Belt exploration project which has had historic production and currently has an inferred mineral resource which totals 3.9 million tonnes grading 1.94 g Au/t, 7.5 g Ag/t, 0.59% Cu, containing 360,000 ounces of gold equivalent (based on US$400 Au/oz, $6.00 Ag/oz and $1.25 Cu/lb.)


Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation reform Act of 1995. readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements".


Contact Information