Largo announces substantial increase to its mineral resource estimate for the Maracas Vanadium project

Symbol: LGO (TSX.V)

• Gulçari "A" resource update: Measured & Indicated Resource of 24.6 MT containing 272,900 tonnes V₂O₅ and additional  Inferred resource of 2.6 MT containing 19,800 tonnes V₂O₅
• Five new satellite deposits delineated with total Inferred resources of 27.8 MT containing 232,100 tonnes V₂O₅
• Increased resource enables  Largo to investigate expanded production scenario

TORONTO, Sept. 17, 2012 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to announce a new NI 43-101 compliant mineral resource at its Maracas Vanadium property located 250 kilometres west of Salvador, Bahia, Brazil.

The Company has completed a revised block model and updated mineral resource estimate for the existing Gulçari "A" deposit and five new satellite deposits incorporating the drilling from the 2011 program, including 72 holes totalling 13,401 metres. The five satellite deposits which extend north from Gulçari "A" for eight kilometres include from south to north; Gulçari "A" Norte, Gulçari "B", São Jose, Novo Amparo and Novo Amparo Norte are all hosted in the Jacare River Intrusion (see figure 1).

At a cut-off grade of 0.45% V₂O₅ and reported from a Whittle-optimized pit shell, the Measured and Indicated mineral resource for the Gulçari "A" deposit is estimated to be 24,640 million tonnes grading 1.11% vanadium pentoxide (V₂O₅) containing 272,900 tonnes V₂O₅ and the Inferred resource is estimated to be 2.6 million tonnes grading 0.76% V₂O₅  containing 19,800 tonnes V₂O₅ . This is a modest increase from the previous estimate in November 2007.

The most significant change to Largo's mineral resource has been the new Inferred resource estimate for the five satellite deposits.  This Inferred resource is estimated to be 27.8 million tonnes grading 0.83% V₂O₅ containing 232,100 tonnes of V₂O₅ at a cut-off grade of 0.45% V₂O₅.

Details for the deposits are found in table 1 below:

Table 1

Gulçari A and Satellite Deposits Mineral Resources

* Resource within an open pit model using US$34.20/t all in operating costs and reported at a 0.45% V2O5 cutoff, reviewed and confirmed by B. Terrence Hennessey (Micon International Limited)

** Resource within a pit shell using US$34.20/t all in operating cost and reported at a 0.45% V2O5 cutoff, reviewed and confirmed by Hebert Oliveira (Coffey Mining)

The updated mineral resource estimate is based on the assumptions reported in the September 2008 Definitive Feasibility Study as amended in May 2009 (see www.sedar.com) prepared by Aker Solutions Canada Inc., The resources would be mined by open pit methods at 581,000 tonnes/year of ore, milled at an onsite facility and 71% of the contained V₂O₅ metal value is projected to be payable after processing charges. The long term price of vanadium pentoxide used in this study is US$6.75 per pound or $US$12.54 per kilogram.

Cautionary Statement: Mineral resources that are not mineral reserves do not have demonstrated economic viability. This preliminary Mineral Resource Estimate is preliminary in nature; it 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 preliminary Mineral Resource Estimate will be realized.

Andy Campbell, P.Geo., Largo's Vice President of Exploration  stated, "We have been very successful in our recent objective at Maracas to define additional Inferred resources through drilling highly prospective areas on the Maracas property in close proximity to the existing resources at the Gulçari "A" deposit. The satellite deposits which extend north for eight  kilometres remain open along strike and at depth so there is excellent potential for further expansion of the resource." He further commented that "Largo controls 40 kilometres of the highly prospective belt and has only tested by drilling for eight kilometres.  Recent exploration including ground magnetic survey, geological mapping and prospecting south of the Gulçari "A" deposit has identified at least 10 additional showings of massive magnetite which remain untested."

Mark Brennan, President and Chief Executive to Largo commented: "We are extremely pleased with the results of the updated Resource Estimate and believe that it will provide significant upside potential to the economics at Maracas. The results of a Technical Report released last week (see press release dated Sept 13, 2012) explore a base case production scenario which does not include the production of additional resources."

He continued, "With this substantial increase in the resource, Largo intends to investigate the near term potential to increase production capacity which we believe will further improve the economics of the project. It is important to note that in anticipation of the potential for additional resources at Maracas, Largo has ordered key production equipment with expanded capacities to minimize future capex expenditures for an increased production scenario."

The mineral resource estimate for Gulçari "A" deposit has been reviewed and confirmed by B. Terrence Hennessey, P.Geo. of Micon International Limited. Mr. Hennessey, who is an independent qualified person as defined under National Instrument 43-101, visited the site from June 26 to 29, 2006, April 15 to 16, 2007 and September 26^th through 30^th, 2011. The mineral resource at Gulçari "A" is considered to be modest and not a material change.

The mineral resource estimate for the satellite deposits have been reviewed and confirmed by Hebert Oliveira, P.Geo. of Coffey Mining. Mr. Oliveira, who is an independent qualified person as defined under National Instrument 43-101, visited the site from September 12 to 23, 2012.   The resource estimation procedures and classification used will be outlined in a technical report by Mr. Oliveira that will be filed on SEDAR within 45 days.

Parameters used in estimating the mineral resource are as follow:

• Database consists of 209 diamond drill holes and 21 trenches. Drill hole workspace in Gemcom database includes different tables for drill holes and trenches.
  
  
• The resource estimation used a new set of cross- sections constructed in Gemcom every 25m, as appropriate for the drill hole density. These cross-sections are perpendicular to strike of the deposit and parallel with rotated local resource grid to avoid any rotation of the block model. New sets of plan views were also constructed every 10m between 100m elevation and 300m elevation.
  
  
• Five major geological domains have been identified for the Gulçari A deposit. Geological domains for magnetite, magnetite-pyroxenite and pegmatite were entirely constructed within the mineralized portion of the sections. Surrounding gabbro and pyroxenite were partly modeled. Magnetite and magnetite-pyroxenite comprise more than 98% of the deposit. Pegmatite and gabbro are internal waste materials.
  
  
• All the solids (geological domains) extended 50m beyond the existing drill holes down dip. In some sections when there were not adequate drill holes, the boundary extents were found to be geologically compatible with previous and next sections.
  
  
• An average of specific gravity was calculated and used for different rock types in massive and banded magnetite (SG= 4.33), magnetitepyroxenite (SG=3.57) and gabbros (SG=3.09) and pyroxenites (SG=3.40).
  
  
• An assay top cut of 3.8 % V₂O₅ was chosen based on probability plot analysis for the magnetite domain. A top cut of 2.0 % V₂O₅ was chosen based on the probability plots for the magnetite-pyroxenite domain.
  
  
• All assay data was composited starting at the collar using cut data from grade capping. All drill hole and trench assay data was composited in 5m intervals then updated domain intersections.
  
  
• The resource estimates for the magnetite and magnetite-pyroxenite domains were prepared by a block model technique using an Ordinary Kriging grade interpolation method. The lower cut-off grade estimated at 0.45% V₂O₅ is based on the feasibility study for the production of Vanadium Pentoxide flake.

Analytical work for the 2011 drill program was carried out by SGS Minerals Laboratory and ALSCHEMEX Laboratory both in Belo Horizonte, and Intertek Laboratory in Sao Paulo, Brazil, all ISO 9001 certified laboratories. Largo employs a systematic industry standard QA/QC program including standards, duplicates and blanks. The samples were analysed for FeO, Fe2O3, SiO2, TiO2 and V₂O₅ by the XRF method.

Andy Campbell, P. Geo., Largo's Vice President of Exploration, is the Qualified Person responsible for the scientific and technical work for the program as defined under National Instrument 43-101 and has reviewed this press release. Security is maintained at the core logging and sampling facility in a locked warehouse onsite located nearby the town of Maracas.

About Largo

Largo is a Canadian-based mineral resource exploration and development company focused on creating a world leading strategic metals company.  Largo currently holds a 90% interest in the Maracás Vanadium Project, a 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 100% 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 Q4 2013 and 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 is listed on the TSX Venture Exchange under the symbol "LGO".

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 Maracas 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.

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SOURCE Largo Resources Ltd.

Image with caption: " Figure 1: Maracas Property Map - Gulçari "A" and Satellite Deposits (CNW Group/Largo Resources Ltd.)". Image available at: http://photos.newswire.ca/images/download/20120917_C7083_PHOTO_EN_17957.jpg

Image with caption: "Figure 2: Cross Section SC-NAN2420: Nova Amparo Norte Target (CNW Group/Largo Resources Ltd.)". Image available at: http://photos.newswire.ca/images/download/20120917_C7083_PHOTO_EN_17959.jpg

Image with caption: "Figure 3: Cross Section SC-GB6990: Gulçari "B" Target (CNW Group/Largo Resources Ltd.)". Image available at: http://photos.newswire.ca/images/download/20120917_C7083_PHOTO_EN_17958.jpg