Largo Resources Ltd.
TSX VENTURE : LGO

Largo Resources Ltd.

January 25, 2011 17:00 ET

Largo Resources Signs LOI for Four New Properties in the Currais Novos Tungsten District, Rio Grande de Norte, Brazil

- LOI Signed to Secure Four (4) Additional Tungsten Projects in the Currais Novos District Totalling 4,595 Hectares

- Significant Potential for Additional Tungsten Resources and Bi-Products

- Site Work at Existing Properties Underway for Planned Initial Production in July 2011

TORONTO, ONTARIO--(Marketwire - Jan. 25, 2011) - Largo Resources Ltd. (TSX VENTURE:LGO) ("Largo" or the "Company") announced today that it has signed a Letter of Intent (L.O.I.) to secure the acquisition of four new attractive tungsten exploration properties, namely Acauã, Cafuca, Galo and Recanto totalling 4,595 hectares near its Currais Novos Tungsten Project, in Rio Grande de Norte, Brazil.

The properties have interesting exploration potential and provide an opportunity to increase Largo's tungsten reserve base within the Currais Novos District. Acauã is a promising target with good underground showings. Cafuca is an old mine that was worked by Anglo American in the 1980s. Galo is immediately adjacent to Cafuca and has the down dip continuation of the mineralization mined on Cafuca. Recanto is a good early stage exploration target in the same belt.

All of the aforementioned properties are in close proximity to the Currais Novos project (see figure 1 below) within the Currais Novos District. Largo expects to sign a definitive agreement by the end of February, 2011, after which, exploration on the properties will commence alongside the ongoing development at Currais Novos.

Prior to the announcement of the completion of a Preliminary Economic Assessment (P.E.A.) for the existing properties at Currais Novos (see press release dated December 14, 2010) installation licences were granted, and an implementation and operational team was assembled.

Construction activities at Currais Novos have commenced and are continuing as scheduled for the recovery of tungsten from mine tailings with initial production set to begin by July 2011.

Closing of Currais Novos Financing Agreement

Largo announces that it has entered into a financing arrangement whereby certain advances may be made in various amounts and tranches up to an aggregate amount of $4.0 million (the "Facility"). An initial advance under the Facility has been made to Largo and future advances under the Facility are contingent upon Largo's completion of certain conditions precedent thereunder. The amounts owed under the Facility may be repaid in common shares of Largo based on the market price at the date of such request, subject at that time to receipt of all required regulatory approvals for the issuance of common shares in exchange for the cancellation of any portion of the Facility. Largo intends to use the proceeds from the Facility to acquire and put into production the Currais Novos property in Brazil.

Largo further announces that it has also entered into a definitive supply agreement in respect of tungsten to be produced from the Currais Novos property, with initial shipments anticipated on or about July, 2011.

About Largo

Largo is a Canadian-based mineral resource exploration and development company focused on creating a world leading strategic metals company. The Company currently holds an 80% interest in the Maracás Vanadium Project, 100% interest in the Currais Novos Tungsten Tailing Project, a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project, all in Brazil, and a 70% interest in the Northern Dancer Tungsten-Molybdenum property located in the Yukon Territory, Canada. The immediate goal of the Company is to develop the Maracás Vanadium Project by Q1 2013 and begin production of WO3 concentrate from the reprocessing of tungsten tailings from Currais Novos by July, 2011. Largo has a very skilled management team both in Canada and Brazil with the ability to advance these projects.

Largo is a publicly listed company on the TSX Venture Exchange under the symbol LGO. For more information please refer to Largo's website: www.largoresources.com.

Mr. Tim Mann, an officer of the Company and a Qualified Person as defined under National Instrument 43-101, has reviewed the scientific and technical disclosure in this press release.

Cautionary Note

This press release contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the prospects of the projects ; 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; ability to obtain necessary funding; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking information 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 information is based on the opinions and estimates of management as of the date such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of the Company. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such Information. Accordingly, readers should not place undue reliance on forward-looking information. Largo does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

To view Figure 1: Location Map - Tungsten Projects, please visit the following link: http://media3.marketwire.com/docs/lgo_map.pdf.

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