Largo Resources provides operational update

Symbol: LGO (TSX.V)

TORONTO, Aug. 21, 2013 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") provides an operational update for its Maracás Vanadium Project in Bahia, Brazil.

While Largo is pleased to inform investors that the majority of the system areas at the Maracás Project remain on track for commissioning in the Fourth Quarter of 2013, the Company hereby announces that a delay to the erection of the kiln has occurred because of the need to recast four of the support rollers required for the kiln. Delayed delivery of the rollers has forced Largo to revise its final schedule for the mechanical completion of the kiln area, and therefore for full commissioning of the Maracás Vanadium Project by approximately one month, to February 2014 (The additional delay will include a 10 day holiday by contractors over the Christmas period).

As announced on June 13, 2013, recasting became necessary when the quality standards of the original rollers procured from the kiln manufacturer were not met by its subcontractor. The four replacement rollers in question were only available to be loaded onto a ship at port on August 15, 2013 and are currently en route to Brazil. They are expected to arrive at site by early October, 2013.

At this time, Largo does not foresee, nor has any reason to believe, that there are any other issues that would cause additional delay beyond the current revised commissioning date.

Mechanical Completion and Commissioning Schedule

(Also see Figure 1 below for detailed expected kiln erection schedule)

Comments from Mark Brennan, President and Chief Executive Officer for Largo:

Mark Brennan, President and Chief Executive Officer, stated, "The Largo technical team have done a great job to keep the project on schedule to date and are disappointed that we have seen a delay of commissioning at Maracás due to a single delivery delay arising from subcontractor problems achieving required quality levels. Largo has explored all options to further expedite the completion of the kiln area to maintain the originally targeted year end commissioning date, but given the revised delivery schedule of the rollers, this will not be possible."

He continued, "All other system areas at Maracás remain on track and are expected to be commissioned before, or during, the Fourth Quarter of 2013. Each system area will have been dry and wet tested and will therefore be ready for operations upon the completion of the kiln. As the rollers are now on a ship to Brazil, we are very confident that our revised February target date will be met."

Comments from Mauro Pereira, Project Director, for Promon Engineering - EPCM Contractors:

Mauro Pereira, of Promon Engineering, on behalf of the Promon Project team stated: "We consider significant progress has been achieved at the Maracás project to date. Construction of all areas and systems of the plant, apart from the kiln, remain on schedule for expected commissioning before the end of the year. We at Promon are extremely satisfied with the advancement of the project to date."

Mr. Pereira further stated: "The management of complex projects aims at mitigating risks, including those relating to supplier and sub-supplier deliverables, diligent oversight and expediting all concerned participants is part of management activities. Nevertheless, problems do occur as shown in the case of the kiln rollers. Both Largo and Promon management teams have worked to minimize the impact of that setback and re-schedule the kiln's erection according to the best possible timetable given the new arrival times of these rollers. We are also confident in this plan and expect the revised date of February, 2014 to be achieved."

Items Completed Since June 13, 2013:

• Negotiations with landowners regarding the 86km electrical power line have concluded and construction is proceeding on track for commissioning.
  
  
• The substations for crushing and milling areas are complete with equipment installed.
  
  
• Both the primary ball mill and the regrind ball mill have been placed on their foundations and work on alignment and connections to piping, electrical trays, cables and periphery systems are proceeding on track.
  
  
• The magnetic separation unit and cyclones have been installed in the beneficiation building.
  
  
• The non-magnetics tailings material belt filter, concentrate filter, leach filter and ammonium metavanadate filter have been installed.
  
  
• Work on the chloride tailings pond has concluded following the installation of the lining system.
  
  
• Conveyors for the non-magnetics and iron ore by-product tailings materials have been installed with belts presently being fitted to the conveyors.
  
  
• The leaching tanks and thickener are complete.
  
  
• The non-magnetics tank and the non-magnetics thickener are complete.
  
  
• Civil work on pier No2 for the kiln has been completed.
  
  
• The metallurgical laboratory is complete with equipment installed and ready for use.
  
  
• Equipment imported from South Africa, including the deammoniator and the sodium sulphate crystallizer, has arrived at site.
  
  
• Tank and thickener construction in the desilication and precipitation areas is complete.
  
  
• Civil construction for the evaporator has been completed; drop, boil out, and concentrate tanks have been installed.

Highlights of Ongoing Development:

• Civil works at the crushed stockpile tunnel area are complete and the concentrate stockpile civil works are proceeding on track.
  
  
• The live rings for the kiln and the cooler have arrived at the project site. The heavy shells and light shells are en-route to the site from Salvador.
  
  
• Six of the ten rollers for the kiln and cooler are expected to arrive in Salvador by the end of August.
  
  
• The additional 4 rollers which were delayed by the supplier are now en-route to Salvador and are anticipated to arrive on site by early-October.
  
  
• Civil construction for ancillaries (including electrostatic precipitator and exhaust fan) has been completed. All remaining civil work relating to the kiln is expected to be completed in all areas by early September.
  
  
• The structures for the kiln feed platform, kiln discharge platform, and burner are being installed presently and are on track with scheduling.
  
  
• Work on the non-magnetic tailings and iron ore by-product dams are progressing well.
  
  
• The water treatment plant is nearing completion and will be commissioned in mid-September.

Overview of Site Development:

Significant progress has been made in all areas at the project site. Civil construction, which involves the pouring of foundations and structures for equipment, is now ramping down and will be complete by mid-September. Good progress is being made as well on the electrical-mechanical assembly front. The majority of the steel structures for equipment and mechanical connections is now in place together with associated equipment.

Major equipment has been arriving at site on an almost daily basis. Some recent arrivals include: the deammoniator, all four belt filters, the boiler and all the live rings for the cooler and kiln. Several pieces of major equipment, including both ball mills and four belt filters, have been placed on their final bases. Fabrication of all remaining equipment procured from off-shore has concluded with shipments either anticipated in the near-term or already underway.

Overview of Kiln Erection Schedule:

The kiln package is the largest piece of equipment at the project and consists of a 90-meter long kiln which will rest on three piers and a 32-meter long cooler that will rest on two piers.

The erection process has already commenced with the placement of the base plates over the concrete piers. Following this, the bearings stands and support rollers will need to be installed. These will then be aligned before the shells are put in place and the shells' rings mechanically coupled. Following this, the whole body of the kiln will be lifted into place and aligned on the rollers for welding. This will be followed by the drive installation and refractory application which is the last step in the erection schedule.

The ancillary equipment (cooler, electrostatic precipitator, fans, burners, stack and off-gas ducts, conveyors, silos and miscellaneous) will be erected in parallel along with the Kiln.

Comments from Les Ford, Technical Director of Operations for Largo:

Les Ford, Technical Director of Operations, stated: "The kiln system is certainly the largest piece of equipment at the project, and one of the most critical in the processing of vanadium. Likewise, the schedule for its erection is the longest and most intensive. Despite this, once heated and operational, ramp-up to production of first V₂O₅ product is usually relatively quick and straightforward."

He continued: "Following the completion of mechanical erection for the kiln (outlined in Figure 1 below), it will be fired and heated for approximately 1 week. After this, we will begin feeding concentrate through the kiln. We expect it will take approximately 5 days to fill the plant with material, after which point, we will have our first salable V₂O₅ product. I have been involved in the erection and operation of several kilns during my 40 year career in the vanadium industry and I am confident that we can ramp-up efficiently."

He further stated: "The kiln operation at Maracás will benefit hugely from the high V₂O₅ content and very low SiO₂ content in the concentrate feed. V₂O₅ is almost double the grade and SiO₂ is half in the Maracás kiln feed compared with the best of the South African operations. High SiO₂ requires an increased amount of sodium in the kiln feed to give an acceptable vanadium solubility. The increased sodium with the SiO₂ results in potential buildup in the kiln, and production of fused material, which causes downtime on the kiln and lower recoveries. Maracás is extremely fortunate that the quality of the concentrate is so good that it gives the potential to achieve higher kiln availability, and higher vanadium solubility than any other operation."

Figure 1: Targeted Schedule for Kiln Erection

About Largo

Largo is a Canadian-based mineral resource exploration and development company focused on creating a world leading strategic metals company. The immediate goal of the Company is to develop the Maracás Vanadium Project by Q1, 2014 and to produce WO₃ concentrate from the reprocessing of tungsten tailings from Currais Novos. Largo's skilled management team both in Canada and Brazil, are confident in their ability to advance these projects. Largo currently holds a 100% interest in the Maracás Vanadium Project, a 100% interest in the Currais Novos Tungsten Tailings Project, a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project, all in Brazil, and a 100% interest in the Northern Dancer Tungsten-Molybdenum property located in the Yukon Territory, Canada.

Largo is listed on the TSX Venture Exchange under the symbol "LGO".

Mr. Tim Mann P.Eng., Chief Operating Officer of Largo, and a Qualified Person as defined by the National Instrument 43-101 has reviewed and approved the contents of this press release.

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

Disclaimer

This press release contains forward-looking information under Canadian securities legislation. forward-looking information includes, but is not limited to, statements with respect to completion of the private placement, Largo's development potential and timetable of the Maracás and Northern Dancer projects; Largo's ability to raise additional funds necessary; the future price of 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". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. 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. 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 section of Largo's annual and interim MD&As.

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SOURCE Largo Resources Ltd.