Largo announces results of Life-of-Mine Study for its Maracás Menchen Mine and resulting significant increase in NPV
PRESS RELEASE October 26, 2017
Largo announces results of Life-of-Mine Study for its Maracás
Menchen Mine and resulting significant increase in NPV
TORONTO, ON – October 26, 2017- 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).
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.
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 V 2O5 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.
CONTACT INFORMATION:
For more information please contact:
Largo Investor Relations
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, transpor t 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
Join our mailing list: http://www.largoresources.com/English/about-us/email-alerts/default.aspx
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 ex tensive 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.