Largo and Glencore enter into off-take agreement

Largo Resources Ltd. has entered into an off-take agreement with Glencore International AG (Glencore) for all vanadium products produced at the Maracas vanadium project in Bahia, Brazil.

The agreement shall remain in effect for a six year evergreen period commencing from commercial production, and shall be renewable for a further six years.

Mark Brennan, Largo President and CEO commented, we are happy to have been able to enter into this off-take with Glencore as they are a significant player in the global vanadium market.

This marks the beginning of what we hope will be a mutually beneficial and increasingly collaborative long-term relationship with Glencore, added Mr. Brennan.

Based on a scoping study by Micon International in December 2007, the Measured and Indicated Mineral Resource at Maracas (Gulcari “A” Deposit) at $5.00/lb vanadium pentoxide consistent with a cut-off grade of 0.46 g/t was estimated to be 22.5 million tonnes grading 1.27% vanadium pentoxide, including a high-grade zone of 8.7 million tonnes grading 2.0% vanadium pentoxide – expected to support the first 10 years of production. Largo anticipates the production of 5,000 tonnes of Ferro Vanadium per year.

The open pit mine design was based on a pit shell reflecting a $5.00/lb long-term price forecast for vanadium pentoxide that was commissioned from CRU of London, England.

The base case view of the CRU forecast at the time of commissioning was that the long-term price of vanadium pentoxide would stabilise at approximately $5.00 per lb (and $23.08/kg for ferro vanadium) through 2017.

Current prices for vanadium pentoxide and ferro vanadium are approximately $14.00/lb and $62/kg respectively. Largo’s expected costs are anticipated to be less than $10/kg for Ferro Vanadium.

Based on the aforementioned resource estimate, Gulcari “A” has 624 million pounds of contained vanadium pentoxide and 406 million pounds of potentially recoverable ferro vanadium.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.