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

TSXV: LGO The Only Pure - Play VANADIUM Producer CORPORATE PRESENTATION NOV 2014 www.largoresources.com Forward Looking Statements The information presented contains forward-looking statements, within the meaning of the United


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TSXV: LGO www.largoresources.com

The Only ‘Pure-Play’ VANADIUM Producer NOV 2014

CORPORATE PRESENTATION

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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.

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Ramping-Up Production. Focused on Cash-Flow.

As at October 10, 2013

Project as at February 20, 2013

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Maracás Menchen Mine

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  • Vanadium Project in Brazil
  • Highest grade/quality; lowest cost project
  • Vanadium demand growth 6.5% CAGR
  • Ramping up production
  • Commercial shipments ongoing
  • Glencore Off-take: 100% Take-or-Pay

Best Mining Deal

Metals and Mining Deal of the Year

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Maracás Milestones

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First concentrate produced, Feb 2014 First Production, Aug 2014

Record 24hr production at 71% capacity Oct 2014 Shipments of material commenced Sept 2014 First production achieved Aug 2014 Final CAPEX within 2% of budget July 2014 Feed to plant commenced May 2014 Construction completed April 2014

Recent Achievements:

Operational break-even Dec 2014 Target 100% Phase 1 Capacity June 2015

Production Targets:

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What is Vanadium?

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

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Steel’s Strongest Alloy

Makes steel stronger, lighter and tougher

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 in Steels Vanadium in Steel

High Strength Low Alloy Steels (HSLA) are the leading market for vanadium in the steel industry Steel is the largest end-use for vanadium 91% 48%

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Vanadium Demand Drivers

  • Increased use of 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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Source: Vanitec

Vanadium is Everywhere

Rebar for construction Buildings, bridges, tunnels Automotive parts Aviation and aerospace Power lines and power pylons Pipelines Railway lines, railway cars, cargo containers Chemical plants, oil refineries, offshore- platforms High strength steel structures Various tools and dies Construction machinery and equipment Missiles and defense Ships Heavy-wear mechanical parts Vanadium applications are growing…

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Source: Autosteel.org, Popular Mechanics, 2008

  • In 2013 VW announced plans to use new high-

strength steel instead of aluminum to make its cars lighter and also to improve fuel efficiency to comply with the strict emissions regulations.

  • In 2013 Ford announced that the F-150 pickup will

soon be 250 to 750 pounds lighter with HSLA steels.

  • Ram’s 2013 3500 pickup 7,000 pounds additional

towing capacity than previous version, by using high- strength steel Despite the recent rapid growth in the automotive sector with new HSLA steels, Vanadium has a long history with automobiles

  • 1906 Henry Ford first introduced vanadium into

the his Model T for the purpose of making it lighter and stronger

Did you know….

Growth Example: Automobiles

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Growth Example: Automobiles

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Growth in Consumption of High-Strength Steels in Automobiles %

Source: Roskill, 2013

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Growth Example: China

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  • The output of hot rolled ribbed steels (rebar) accounts

for 1/4 of steel production in China.

  • Vanadium alloyed high-strength rebars have

significantly higher resistance to seismic events

  • Vanadium enhances the engineering quality which

reduces the amount of steel used by 10%-20% (and as an added benefit, results in energy saving as well as emissions cutting)

  • The Chinese government implemented Code

for Design and Concrete Structures in 2010 and an Update on the Code in 2011.

  • This policy seeks to gradually eliminate the use
  • f low strength bars by 2015 and implement an

increase in Vanadium content in steel rebar.

(Global Steel 2013, Ernest&Younge) (Gan Yong,Dong Han “Proceedings of International Seminar on Production and Application of HIgh Strength Seismic Grade Rebar Containing Vanadium”)

Did you know….

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China’s Projected Impact on Supply

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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.)

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

Japan Europe China

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Vanadium Batteries?

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Vanadium Redox Batteries are a Potential New Growth Prospect

Renewable energy sources (like wind and solar) generate energy intermittently This creates a mismatch between supply and demand VRBs allow energy generated at off-peak times to be time shifted to when it is needed most Governments like Germany, the USA, China and Japan are now making the development of renewable energy resources mandatory

  • California requires one third of its power to be

generated by renewable energy by 2020

  • Germany is targeting 80% of energy will come from

renewables by 2050.

Did you know….

Source: Journal of Power Sources Source: California Energy Commission, Renewables Portfolio Standard Source: German Renewable Energies (Act, 2014)

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Largo is the only Pure Play Producer of Vanadium

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Supply is Concentrated

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Source: Roskill, 2013

*Tonnage calculated in V2O5 Equivalent

Total Supply 127,000 Tonnes (V2O5 Equiv)

  • f Global Supply

Tonnes V2O5 Equiv

Other 8,000

Total Demand 136,000 Tonnes (V2O5 Equiv)

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Global Production by Method

18 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Co-product (slag) production Primary Production Secondary Production % of Global Production $ Cost of Production per Lb V2O5 Equiv $ Largo Cost of Production per Lb V2O5 Equiv Global Production by Method & Cost

NTD: Prices calculated into V2O5 Equiv Source: Roskill 2013; TTP Squared/Atlantic, Vanadium Market Outlook Source: Largo forecast based on company information & industry experts

% of Global Production $ Cost of Production

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Vanadium Historical Pricing

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Consistent floor at $5.00 per lb

$ Largo Cost $ Price V2O5

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Maracás Location Details

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  • Government and local support
  • Arid climate, ideal topography
  • Management with regional experience
  • Strong tax incentives
  • Local familiarity with mining

Best Mining Deal

Metals and Mining Deal of the Year

  • Brazil was rated in the top 5 countries for mining

investment in 2013

  • Mining makes up approx. 4% of Brazil’s GDP

Did you know….

Source: Behre Dolbear 2013 Ranking of Countries for Mining Investment Source: The Economist, June 2013

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Concessions and Mineralization

= Campbell Pit (first 12 Years)

Maracás concessions and strike length 21

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Mineral Resources

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+2 Times Industry Average Grade

30.4 Million Tonnes 24.6 Million Tonnes

Gulcari “A” Deposit Satellite Deposits

Contained within

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0.0 1.0 2.0 3.0 4.0

Concentrate SiO2% Concentrate V2O5% Ore V2O5% Maracas Australian South African

Cost Advantage

*Average grade comparisons compiled by Les Ford, presentation March 8, 2011

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Highest Grade/Quality Vanadium Deposit in the World

Higher head-grade and higher iron content Concentrate has much higher V2O5 Concentrate has fewer contaminants like silica

Lowest Cost Production

% % % % %

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Campbell Pit Cross Section

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Maracas Project Economics

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NTD: As outlined in 2013 Preliminary Economic Assessment [1] including iron ore byproduct credit – OPEX without credit is $3.18 (still lowest cost producer) [2] 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[1] V2O5 price – 3 year avg $6.37 Average annual cash flow $89 million[2] Reported after taxes, royalties, SG&A & sustaining capex

Strong Economics Near-Term Cash Flow

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Low Cost with Potential to Improve

  • Lower mining costs
  • Lower power costs
  • In-house crushing
  • Depreciation of BRL

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Contracted reductions in operating costs since PEA

*including iron ore byproduct credit - OPEX without credit is $3.18 (still lowest cost producer)

$2.10/lb

OPEX costs*

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Vanadium Historical Pricing

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Profitable at historic lows

$ Largo Cost $ Price V2O5

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Process Flow Sheet

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Proven, industry tested process

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Year 1 Ramp-up Projections

29 10 20 30 40 50 60 70 80 90 100 110 1 2 3 4 5 6 7 8 9 10 11 12 Year 2

Year 1 Total: 5,511 Tonnes V2O5 Year 2 Total: 9,689 Tonnes V2O5 Plant Capacity: 10,000 Tonnes V2O5 % Plant Capacity (time operating) 100% Month

We are Here

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Production Profile

30 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 $0 $20 $40 $60 $80 $100 $120 $140 Year 1 Year 2 Year 3 Year 4 Year 5

Production Cash-flow (MILLIONS)

Free Cashflow ($M) Operating Cashflow ($M) Tonnes V2O5 Equiv.

Phase 1

(10,000 Tonnes Capacity) Initial Ramp Up

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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Strong Partners

  • Largest trader of Vanadium
  • Take-or-pay agreement
  • 100% of all material produced

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De-risked product sale

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Strong Management

32 Mark Brennan President & CEO 25+ years experience in capital markets Michael Mutchler Chief Operating Officer 20+ years mining engineering experience operating and managing mines Les Ford SVP & Technical Director, Brazil Vanadium expert. 40+ years experience building/operating vanadium facilities globally Kurt Menchen President of Operations, Brazil 30+ years mining engineering experience operating mines in Brazil Andy Campbell VP Exploration 30+ years of mining exploration experience Ernest Cleave Chief Financial Officer 10+ years experience in financial management Andrew Hancharyk Chief Legal Officer 20+ years experience in corporate Law Casper Groenewald Deputy Technical Director 20+ years metallurgical engineering experience including 5+ in vanadium processing

Significant Experience Building and Operating Mining Facilities

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Maracás Environment

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Project as at December 11, 2013

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Simple, Low Cost Mining

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150 meters Magnetite (ore) Gabbro (waste)

Current mining operations

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The Ford Facility at Maracás

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Project as at February 20, 2013

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Recent Milestones

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Production Achieved

Above: First delivery September, 2014

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Recent Photos

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Crushing Circuit

30,000+ tonnes of crushed ore stockpiled

Milling Circuit

5,000+ tonnes of concentrate stockpiled

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Recent Photos

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Kiln and Cooler System

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Corporate Structure

39 Stock symbol: LGO – TSX-V Share price (Nov 7, 2014): $2.00 Shares issued (Basic): 109 million Market Cap C$218 million 52-week High/Low: $3.60 / $1.90 Management & Institutions: 75% Warrants & Options (Basic): 30 million Institutional Shareholders Arias Resource Capital - 28% Mackenzie Investments - 14.6% Eton Park Capital Management - 10.1% Ashmore Investment Management - 10.1%

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

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Potential Chrome/PGM Discovery

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  • Chromite and PGMs are often associated in ultra-

mafic rocks like the ones discovered near the Maracas Menchen Mine

  • This discovery potentially resembles deposits like

those in the Bushveld region of South Africa which produces a significant amount of the world’s chrome, PGMs and vanadium

  • Potential new discovery of chrome and PGMs

located North of current mine area

  • Chromite layers trace 3km strike with at least

two zones of chromite layers 20 to 25 metres wide at surface with fine-grained sulphides that potentially contain platinum

  • Exploration program underway, initial results

pending

Did you know….

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Investment Summary

  • Ramping up production
  • Commercial shipments ongoing
  • High grade, low cost production project
  • Significant cash-flow potential in near-term
  • Only ‘pure-play’ exposure to vanadium
  • Commodity with strong growth profile
  • Management that delivers

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Substantially de-risked flagship project with near term cash flow

Undervalued Early Stage Producer With Strong Upside Potential

Project as at November 19, 2013 Project as at December 26, 2013 Project as at February 20, 2013

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Darcie Ladd

Corporate Development dladd@largoresources.com 416-861-9406

Mark Brennan

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

LARGORESOURCES.COM

Largo Resources LargoResources1 Largo Resources largoresources

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Appendix

  • Board of Directors
  • Secondary Projects
  • Vanadium – additional growth profiles
  • Maracás Mining Process
  • Currais Novos
  • Northern Dancer
  • Campo Alegre de Lourdes

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Appendix: Strong Board

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Mark Brennan Director Largo Resources President & CEO Dirk Donath Director Managing director Aimaira Capital Management Alberto Arias Director Founder & President Arias Resource Capital Dan Ioschpe Director CEO of Lopche-Maxion David Brace Director CEO of Karmin Exploration. Formerly with Aur Resources Wayne Egan Director Partner at Weir Foulds LLP Alex Monteiro Director Partner at CALT Ltd.

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Secondary Projects

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Blue sky potential to add value

Currais Novos

Region: Brazil Metal: Tungsten Stage: Care & Maintenance

Campo Alegre

Region: Brazil Metal: V, Ti, Fe Stage: Exploration

Northern Dancer

Region: Yukon, Canada Metal: Tungsten Stage: PEA Complete

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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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Appendix: Maracás Mining Process*

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  • Deposit outcrops at surface
  • Less than 1 meter pre-

stripping

  • High grade material from

surface continues to depth

Unit Mining Cost Total OPEX Revenue Tonne of ore $14.29 $61.50 $129.97 Per lb V2O5 /equiv.** $0.82 $2.10 $6.09

*As outlined in 2013 Preliminary Economic Assessment **Includes all royalties less credit Iron Ore byproduct

Simple, Cost-Effective Open Pit Mining Process

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Appendix: Currais Novos

  • Historical production district
  • Significant production from 1940s to 1970s

(approx 8% of global supply)

  • Numerous potential acquisitions in

immediate vicinity – both underground and tailings

  • Provides significant expansion potential
  • Preliminary exploration underway with goal
  • f defining additional resources
  • Production Commenced December 2011
  • Plant optimization continued through 2012
  • Production temporarily suspended due to

severe regional drought in 2013

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Operational History:

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Appendix: Campo Alegre Project

  • 133 Million Tonnes Grading 50% Fe, 21% TiO2, 0.75%

V2O5*

  • 100% owned iron, titanium, and vanadium

deposit - seven concessions covering 9,274.66 hectares

  • Purchased in 2009 for USD $250,000.00 from

Bahia State Mining Development Agency (CBPM)

  • Preliminary metallurgical testwork completed in

2011 suggested potential for titanium dioxide (TiO2) project

* Historical resource provided by CBPM (Bahia State Mining Development Agency)

Mineral Resources (non-NI 43-101)

Development Milestones

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Appendix: Northern Dancer Project

  • 223.4 MT grading 0.102% WO3 and

0.029% Mo (M&I)

  • Higher-grade tungsten and molybdenum

zone: 60.3 MT of 0.14% WO3 and 0.045% Mo (M&I)

  • 201.2 MT grading 0.09% WO3 and

0.024% Mo (I)

  • PEA complete
  • Discussions with off-take partners and

JV partner Development Milestones Mineral Resources

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Appendix: Northern Dancer PEA

Tungsten (per MTU) Moly (US$ per lb) IRR (%) NPV @ 8% (US$ millions) $275 $17.50 20.0 918 $300 $17.50 22.2 1,110 $325 $17.50 24.4 1,302 $350 $17.50 26.5 1,494 $365 $17.50 27.8 1,769

* The PEA is preliminary in nature, and includes inferred resources that are too speculative geologically to have economic considerations applied to them. There is no certainty that the PEA will be realized.

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  • Low Cash cost producer: US $116 per MTU
  • 49 year mine life
  • Pre-production capital costs: $645 million
  • Cumulative cash flow US$4.8 billion
  • Average annual production of 833,000 MTU

tungsten (18.3 million pounds) and 5,959,000 pounds molybdenum over initial 23 years

  • Current trading price of US$370 MTU

Attractive economics at current tungsten prices Strategic asset for long term supply of tungsten