Largo Resources Ltd. Provides Update on Status on Joint Venture Agreement With Vinci Partners - Signing of definitive agreement scheduled for January, 2011

- Signing of definitive agreement scheduled for January, 2011

TORONTO, ONTARIO -- (Marketwire) -- 12/16/10 -- Largo Resources Ltd. (TSX VENTURE: LGO) ('Largo') is pleased to provide an update regarding the status of its previously announced Letter of Intent ('LOI') (see press release October 27, 2010) to enter into a joint venture agreement with Vinci Capital Gestora de Recursos Ltda. ('Vinci Capital') in order to provide Largo with US$120 million in equity funding primarily for furthering the development of its Maracas Vanadium project in Brazil. Largo expects that a definitive agreement will be signed by the end of January, 2011.

Vinci Capital is formed by one of Brazil's most experienced private equity team with consistent investment performance since 2001. Vinci Capital is the private equity division of Vinci Partners Investmentos Ltda. ('Vinci Partners') that has a capital base of $3 billion; $2.2 bilion of which is its Partners' capital. This Joint Venture represents its first investment in Brazil's growing mining and minerals sector.

'We have been working very diligently with Vinci Capital in order to move towards closure of this transaction.' stated Mark Brennan, President & CEO of Largo. He continued, 'There has been a considerable amount of due diligence and documentation preparation that has been required by both parties. Largo and Vinci Capital remain committed to moving forward and closing the transaction as quickly as possible.'

Under the terms of the LOI, Vinci Partners and its co-investors will provide US$120 million into a newly formed Brazilian company for the purposes of (i) acquiring the 20% minority interest in the Maracas Vanadium project that Largo does not currently own, (ii) developing the Maracas mine, and (iii) progress other projects in Brazil, including the Currais Novo and Campo Allegre projects currently held by Largo.

'The due diligence process and the negotiation of the agreements among the various parties are taking more time than initially anticipated. Nonetheless, at this stage, the information already analyzed gives us confidence that a definitive agreement may be executed by the end of January,' stated Jose Guilherme Souza, a partner with Vinci Partners.

Under the terms of the LOI, Largo shall contribute its Maracas, Currais Novos, and Campo Allegre projects and its operating team to the newly formed Brazilian Company in consideration for a minimum economic interest of 40% of the newly formed Brazilian Company with additional performance warrants that would enable Largo to increase its stake therein.

Attendant to the final investment and shareholder agreements will be corporate governance controls that would provide Largo with the right to nominate two of the five board members of the new Brazilian Company, and also provide super majority vote or veto rights on material issues such as acquisitions/dispositions, liquidity events and dividend distributions.

Largo retains direct ownership of the Northern Dancer property and will continue to look to acquire directly additional mineral projects outside of Brazil.


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 Maracas 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 Maracas Vanadium Project by Q1 2013 and begin production of WO3 concentrate from the reprocessing of tungsten tailings from Currais Novos by June, 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, is the Qualified Person as defined under National Instrument 43-101 responsible for the scientific and technical disclosure in this press release.



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 the proposed use of proceeds, receipt of regulatory approval; completion of the transactions on the terms proposed; Largo's development potential and timetable of its projects; Largo's ability to raise additional funds necessary; the future price of ferrovanadium and vanadium pentoxide; 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 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 the Largo to be materially different from those expressed or implied by such forward-looking information, including but not limited to 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 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 information. Largo does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

NEITHER THE TSX VENTURE EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.



Contacts:

Largo Resources Ltd.
Darcie Ladd, Business Development
(416) 861-5938
dladd@largoresources.com

Largo Resources Ltd.
Mark Brennan, President & CEO
(416) 861-5886
mark@largoresources.com
www.largoresources.com