CORPORATE PRESENTATION MAY 2014 www.largoresources.com Forward - - PowerPoint PPT Presentation

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CORPORATE PRESENTATION MAY 2014 www.largoresources.com Forward - - PowerPoint PPT Presentation

TSXV: LGO Near Term VANADIUM Producer Metals and Mining Deal of the Year Best Mining Deal CORPORATE PRESENTATION MAY 2014 www.largoresources.com Forward Looking Statements The information presented contains forward-looking statements,


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TSXV: LGO

Best Mining Deal

www.largoresources.com

Near Term VANADIUM Producer MAY 2014

CORPORATE PRESENTATION

Metals and Mining Deal of the Year

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TSXV: LGO

Forward Looking Statements

The information presented contains “forward-looking statements,” within the meaning of the United States Private Securities Litigation Reform Act of 1995, and “forward‑looking information” under similar Canadian legislation, concerning the business, operations and financial performance and condition of the Company. Forward-looking statements and forward‑looking information include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; metal prices and demand for materials; capital expenditures; success of exploration and development activities; permitting time lines and permitting, mining or processing issues; government regulation of mining operations; environmental risks; and title disputes or claims. Generally, forward-looking statements and 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,”, “projects” or variations of such words and phrases or state that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur” or “be achieved.” Forward-looking statements and forward‑looking information are based on the opinions and estimates of management as of the date such statements are made, and they 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 Company to be materially different from those expressed or implied by such forward- looking statements or forward‑looking information, including, but not limited to, unexpected events during operations; variations in ore grade; risks inherent in the mining industry; delay or failure to receive board approvals; timing and availability of external financing on acceptable terms; risks relating to international operations; actual results of exploration activities; conclusions of economic valuations; changes in project parameters as plans continue to be refined; and fluctuating metal prices and currency exchange rates. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or 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 statements and forward‑looking information. The Company does not undertake to update any forward-looking statements or forward‑looking information that are incorporated by reference herein, except in accordance with applicable securities laws. Investors are advised that National Instrument 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources The information presented uses the terms “measured,” “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically

  • r legally mineable.

2

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Production in sight.

As at October 10, 2013

Project as at February 20, 2013

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Maracas Vanadium Project

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Metals and Mining Deal of the Year Best Mining Deal

§ Vanadium Project in Brazil § Highest grade, quality; lowest cost project § Feed to plant underway, first production expected

shortly

§ Glencore Off-take: 100% Take-or-Pay § Vanadium demand growth 6.5% per annum

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Maracas Project Economics*

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*As outlined in 2013 Preliminary Economic Assessment **including iron ore byproduct credit – OPEX without credit is $3.18 (still lowest cost producer) ***Average years 1-15

Net Present Value $554 million After tax IRR 26.3% Discount rate 8% Exchange rate (BRL:USD) 2:1 Average Production 11,400 t V2O5 equiv Mine life 29 Years Initial CAPEX 235 million OPEX $2.10** V2O5 price – 3 year avg $6.37 Average annual cashflow $89 million***

Includes taxes, royalties, and sustaining capex

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Vanadium – a Strategic Metal

§ Most used alloy to strengthen steel § Significantly increases tensile strength § Resistant to: seismic, corrosion, abrasion § Proven process for separation

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Makes steel stronger, tougher and lighter

Source: vanitec.org/Roskill, 2013

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Vanadium – Few Substitutes

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2lbsV 1 Tonne of Steel

2X

Strength

Highest strength to weight ratio of any alloy

Source: vanitec.org

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Uses of Vanadium

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Source: Roskill, 2013

Uses of Vanadium Vanadium in Steel

High Strength Low Alloy Steels are the leading market for vanadium in the steel industry Steel is the largest end- use for vanadium

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§ Rebar for construction § Buildings, bridges, tunnels § Automotive parts § Pipelines § Aviation and aerospace § Power lines and power pylons § Chemical plants, oil refineries, offshore-platforms § Various tools and dies § High strength steel structures § Construction machinery and equipment § Cast iron used for rolls in steel mills

Vanadium is Everywhere

Source: Vanitec

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Vanadium Demand Drivers

§ Increased use in steel § Growth in applications containing V § Higher quality steel standards in BRICs

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Strong growth profile

Source: Roskill, 2013

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Growth Example: China

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“Vanadium-enhanced rebar provides buildings with the improved structural support necessary to better withstand the higher magnitude earthquakes so frequently seen in China,” “It is extremely important that an earthquake-prone country like China is well informed about the overall benefits of vanadium-enhanced steel as it relates to the country’s seismic precautions moving forward.”

  • - Robert Glodowski, Director of Technical Services at East Metals North America and a member
  • f Vanitec.

http://www.asminternational.org

§ The Chinese government implemented Code for Design and Concrete Structures in 2010 and an Update on the Code in 2011. § This policy seeks to restrict and gradually eliminate the use of lower strength bars by 2015 and implement an increase in Vanadium content in steel rebar.

(Global Steel 2013, Ernest&Younge)

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Growth Example: China

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Source: Les Ford Vanadium and Steel presentation, PDAC 2010 Source: Roskill 2013

% of Vanadium Used per Tonne of Steel by Region Total Tonnes by Region (V2O5 Equiv.) Projected Impact of China’s Increased Rebar Standards

Actual Consumption 2010 Projected Impact of China’s 2013 Rebar Standards

Japan Europe China

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Growth Example: Automobiles

13 In 2013 VW announced plans to use new high-strength steel to make its cars lighter and also to comply with the strict emissions regulations. VW chose to replace aluminum with light weight steel to improve fuel efficiency. “VW…is giving up aluminum for the high tensile steel, which is up to six times stronger than conventional steel. The new material not only made the new Golf with about 100kg lighter, but also helped the company reduce costs.” (Reuters)

Volkswagen Lowering Costs and Increasing Efficiency

Ram’s 2013 3500 pickup 7,000 pounds additional towing capacity than previous version, all thanks to high-strength steel.

Ram Increasing Strength

In 2013 Ford announced that the F-150 pickup will soon be 250 to 750 pounds lighter. A recent study showed that the material is not only cheaper to use but also safer, the vehicles tested showing an outstanding crash performance.

Ford Reducing Weight

Source: www.autosteel.org

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Projected Growth in Automotive

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47% 22% 40% 78% 41% 12% 10% 50%

USA: Consumption Growth of High-Strength Steels in Automobiles %

Source: Roskill, 2013 Source: US Steel

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Growth Example: Aircraft

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§ Aircraft usages presently accounts for approx. 7% of vanadium market and is growing rapidly § Demand projected to double by 2016 § Aircraft manufacturers using increasing amounts of titanium-vanadium alloy § Boeing's new 787 Dreamliner and the Airbus 380 each contain more than 100 tonnes of vanadium alloys, more than double that in a Boeing 747

Source: ¡Largo ¡ ¡Source: ¡www.asiaminer.com ¡Source: ¡TTP ¡Squared

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Projected Growth in Aircraft

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Source: Roskill, 2013 Source: Airline Monitor

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Supply is Concentrated

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Brazil production provides stability of supply

Source: Roskill, 2013

China 70,000 Tonnes (V2O5 Equiv) South Africa 35,000 Tonnes (V2O5 Equiv) Russia 14,000 Tonnes (V2O5 Equiv) Total Supply 127,000 Tonnes (V2O5 Equiv) Total Demand 136,000 Tonnes (V2O5 Equiv)

*Tonnage calculated in V2O5 Equivalent

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Vanadium Historical Pricing

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Consistent floor at $5.00 per lb

Largo Operating Costs

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History of Deposit

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§ Largo controls 40 km of prospective strike length § Twenty (20) exploration permits § Totaling 28,587 hectares § Largo & others – 321 holes totaling 40,953.64 metres § Largo (2007 thru 2013) 252 holes 35,053.24 metres § 2008 - Proven & Probable Reserves on Gulcari A § Discovery of two new zones (Novo Amparo Norte & Gulcari B Sul) § 2012 - New and updated resources of 6 of 7 zones including Gulcari A, Gulcari A Norte, Gulcari B, Sao Jose West, Novo Amparo and Novo Amparo Norte § Updated Measured, Indicated and Inferred Resources Gulcari A § New Inferred Resources for Gulcari A Norte, Gulcari B, Sao Jose, Novo Amparo and Novo Amparo Norte

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History of Maracas Development

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First concentrate produced, Feb 2014 Kiln and leaching area, Mar 2014

Agreement to purchase Maracas Oct 2006 Maiden resource released Dec 2006 First drill hole at Maracas Feb 2007 Glencore off-take signed May 2008 DFS for Maracas released Aug 2008 Localization License received May 2009 $115 million equity financing April 2011 Installation License received Oct 2011 $175 million debt facility with BNDES May 2012 Construction commenced June 2012 Commissioning of kiln April 2014 Feed to plant commenced May 2014

Recent Achievements:

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Concessions and Mineralization

= Gulcari “A” Deposit (first 12 Years)

Maracás concessions and strike length 21 § Largo controls 40 km of prospective strike length § Twenty (20) exploration permits § Totaling 28,587 hectares

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Gulcari “A” Geological Plan Map

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Gulcari “A” Cross Section

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Gulcari A Reserves

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Reserve Estimate Reserve Category Magnetite Tonnes Magnetite (V205%) Proven 2,445,686 2.17 Probable 2,796,953 2.04 Subtotal 5,242,639 2.10 Magnetite-Pyroxenite Tonnes Magnetite-Pyroxenite (V205%) Proven 4,976,002 0.84 Probable 3,632,558 0.90 Subtotal 8,608,560 0.87 Total Proven 7,421,688 Total Probable 6,429,511 Total Ore 13,851,199 Average V205% = 1.34 Waste 28,295,741 Total In-Pit 42,146,941 Strip Ratio = 2.04

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Gulcari A & Satellite Deposit Resources

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V2O5 (%) Measured 8,870,000 1.37 121,500 Indicated 15,770,000 0.96 151,400 M ¡&I 24,640,000 1.11 272,900 Inferred 2,610,000 0.76 19,800 Gulçari ¡A ¡Norte** Inferred 9,730,000 0.84 81,388 Gulçari ¡B** Inferred 2,910,000 0.70 20,312 Novo ¡Amparo** Inferred 1,560,000 0.72 11,255 Novo ¡Amparo ¡Norte** Inferred 9,720,000 0.87 84,453 Sao ¡Jose** Inferred 3,900,000 0.89 34,706 Satellite ¡Deposits ¡(5)** Inferred 27,820,000 0.83 232,114 Deposits Category Tonnes Contained ¡V2O5 (tonnes) Gulçari ¡A*

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Process Flow Sheet

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Proven, industry tested process

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  • Investigating dry magnetic separation for disseminated ore –

may be able to increase beneficiation plant yield. Lab tests

  • complete. Conducting small pilot plant test on-site.
  • Illmenite in non-magnetic tailings recoverable with higher gauss

second stage magnetic separation. Lab tests complete. Next step is pilot plant.

  • PGM’s in mill ore recoverable with flotation. Lab tests complete.

Next step is pilot plant.

Additional Opportunities

27

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Year 1 Ramp-up Projections

28 Conservative Ramp-Up Projections with Opportunity to Improve

Year 1 Total: 5,511 Tonnes V2O5 Year 2 Total: 9,689 Tonnes V2O5 Plant Capacity: 10,000 Tonnes V2O5 100% % Capacity

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Production Profile

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Phase 1

(10,000 Tonnes Capacity) Initial Ramp Up, Implementing Expansion & FeV Plant

Phase 2

(15,000 Tonnes Capacity) Expanded Production rates & FeV

*As outlined in 2013 Preliminary Economic Assessment – Includes all taxes, royalties, and SG&A **Does not include debt repayment

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Maracas Environment

30 Gulcari “A” Open Pit Main Access Road Admin Facilities Roasting (kiln) Crushing

1 km

Milling Leaching Desilication Precipitation Final Product

Project as at December 11, 2013

Tailings Tailings

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Simple, Low Cost Mining

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25 meters of

  • re at surface

150 meters Magnetite (ore) Gabbro (waste)

  • Dips at 65
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Recent Construction Milestone

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Crushing Circuit successfully commissioned

Above: Crushed ore stockpile, January 2014

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Recent Construction Milestone

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Milling and beneficiation system commissioned – February 2014

Above: main ball mill being commissioned

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Recent Construction Milestone

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Commissioning of Kiln – commenced March, 2014 Kiln feed commenced May, 2014

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Recent Photos

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Project Finance

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EQUITY

2011 2012 2012 2014 construction

to

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Maracas Vanadium Project

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Metals and Mining Deal of the Year Best Mining Deal

§ Vanadium Project in Brazil § Highest grade, quality; lowest cost project § Feed to plant underway, first production expected

shortly

§ Glencore Off-take: 100% Take-or-Pay § Vanadium demand growth 6.5% per annum

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Corporate Structure

38 Stock symbol: LGO – TSX-V Share price (May 26, 2014) $0.285 Shares issued (Basic): 982 million Market Cap C$280 million 52-week High/Low: $0.305 / $0.155 Management & Institutions: 75% Warrants & Options (Basic): 253 million Cash: $38.5 million Debt: $159 million Institutional Shareholders Arias Resource Capital - 25.9% Mackenzie Investments - 14.3% Eton Park Capital Management - 11.1% Ashmore Investment Management - 11.4%

Shareholders & Project Partners

Project Finance Deal of the Year Awards - March 2013

Project Partners Glencore International

100% 6 yr take-or-pay off-take for Maracas

Business Development Bank of Brazil Bank Itau, Votorantim, Bradesco

*Cash based on last reported financial statement – September 30, 2013

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39 39

Mark Brennan

President and CEO mbrennan@largoresources.com 416-861-9797

LARGORESOURCES.COM

Largo Resources LargoResources1 Largo Resources largoresources

Mike Mutchler

Chief Operating Officer mmutchler@largoresources.com 416-861-9797