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 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 or legally mineable. TSXV: LGO 2
Ramping-Up Production. Focused on Cash-Flow. As at October 10, 2013 TSXV: LGO 3 Project as at February 20, 2013
Maracás Menchen Mine 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 TSXV: LGO 4
Maracás Milestones Recent Achievements: 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 First Production, Aug 2014 Feed to plant commenced May 2014 Construction completed April 2014 Production Targets: Operational break-even Dec 2014 Target 100% Phase 1 Capacity June 2015 First concentrate produced, Feb 2014 TSXV: LGO 5
What is Vanadium? Steel’s Strongest Alloy Most used alloy to strengthen steel Significantly increases tensile strength Resistant to: seismic, corrosion, abrasion Proven process for separation Makes steel stronger, lighter and tougher TSXV: LGO 6 Source: vanitec.org/Roskill, 2013
Vanadium – Few Substitutes 2X 1 Tonne of 2lbsV Steel Strength Highest strength to weight ratio of any alloy TSXV: LGO 7 Source: vanitec.org
Uses of Vanadium Vanadium in Steel Steel is the largest 91% end-use for vanadium Uses of Vanadium in Steels High Strength Low 48% Alloy Steels (HSLA) are the leading market for vanadium in the steel industry TSXV: LGO 8 Source: Roskill, 2013
Vanadium Demand Drivers Increased use of steel Growth in applications containing V Higher quality steel standards in BRICs Strong growth profile TSXV: LGO 9 Source: Roskill, 2013
Vanadium is Everywhere Rebar for Automotive parts Aviation and Power lines and Buildings, bridges, construction aerospace power pylons tunnels Railway lines, railway Chemical plants, oil High strength steel Pipelines Various tools and dies cars, cargo containers refineries, offshore- structures platforms Heavy-wear mechanical Construction machinery Ships Missiles and defense Vanadium parts and equipment applications are growing… TSXV: LGO 10 Source: Vanitec
Growth Example: Automobiles 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 Did you know…. 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 TSXV: LGO 11 Source: Autosteel.org, Popular Mechanics, 2008
Growth Example: Automobiles Growth in Consumption of High-Strength Steels in Automobiles % TSXV: LGO 12 Source: Roskill, 2013
Growth Example: China 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 of low strength bars by 2015 and implement an increase in Vanadium content in steel rebar. Did you know…. 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) (Global Steel 2013, Ernest&Younge) TSXV: LGO 13 (Gan Yong ， Dong Han “ Proceedings of International Seminar on Production and Application of HIgh Strength Seismic Grade Rebar Containing Vanadium”)
China’s Projected Impact on Supply Total Tonnes by Region (V2O5 Equiv.) Projected Impact of China’s China 2013 Rebar Standards Europe Japan Actual Consumption 2010 % of Vanadium Used per Tonne of Steel by Region Source: Les Ford Vanadium and Steel presentation, PDAC 2010 TSXV: LGO 14 Source: Roskill 2013
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