www.largoresources.com An Emerging Market Leader for VANADIUM and TUNGSTEN Production November 2012 CORPORATE PRESENTATION
Jun 19, 2015
www.largoresources.com
An Emerging Market Leader
for VANADIUM and TUNGSTEN Production
November 2012
CORPORATE PRESENTATION
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.
2
Investment Highlights
Exposure to growing supply constrained commodities
Specializing in production and development of vanadium and tungsten projects
World-class Maracas Vanadium Project
Lowest cost production
Fully funded, permitted and in Construction
Commissioning targeted for Q4, 2013
Substantial cashflow generation in 2014
Significant expansion potential at two near-term assets
Maracas & Currais Novos
High quality Management, Board and supportive core
investor-base
3
Strategic Development Timeline
4
Corporate Structure
5
Stock symbol: LGO – TSX-V
Share price (Nov 5, 2012): $0.22
Shares issued (Basic): 870 million
Market Cap C$191 million
52-week High/Low: $0.365 / $0.20
Management & Institutions: 75%
Warrants & Options (Basic): 220 million
Institutional Shareholders
Arias Resource Capital-19.9%
Mackenzie Investments-15.9%
Eton Park Capital Management-12.5%
Ashmore Investment Management-12.5%
Project Partners
Glencore International 100% 6 yr take-or-pay off-take agreement for Maracas
vanadium project
Major Tungsten End User 100% Off-take agreement for Currais Novos tungsten project
Shareholders & Project Partners
Currais Novos Shareholder site visit – August 2012
Mark Brennan, President & CEO
Founding member of Desert Sun Mining with over 20 years financing experience in North America and Europe. Founder and
Principal of Linear Capital, Brasoil Corporation, Castle Resources, James Bay Resources, Morumbi Oil & Gas and former President,
CEO and Chairman of Admiral Bay Resources.
Tim Mann, P.Eng., Chief Operating Officer
Mining Engineer with extensive international operations and management experience in mine engineering, development and
operations with SNC Lavalin, Placer Dome and Goldcorp.
Andy Campbell, M.Sc., P.Geo., Vice President Exploration
Over 33 years experience in mining and exploration, including LAC Minerals and Noranda.
Kurt Menchen, General Manager, Brazil
Former Jacobina Mine Manager, Brazil. Mining Engineer with over 30 years experience including Anglo Gold and Desert Sun
Mining.
Les Ford, Technical Director of Brazilian Operations
With over 40 years of experience in constructing, developing and producing vanadium projects, Mr. Ford is arguably one of the
world’s foremost experts in vanadium. Previously Assistant General Manager of Highveld Steel and a member of the Highveld
Executive Committee, and Managing Director of Rand Mines Vansa.
Douglas Herbst, Maracas Project Manager
Donald Clark, Construction Advisor and Specialits
Mr. Clark formerly headed up Yamana's construction management team in Brazil. Mr. Clark has over 30 years of experience
managing the design, construction and operations of major mineral processing plants in Brazil and abroad and will provide guidance
with respect to the construction management process for Maracás.
John Laurie, C.G.A., Chief Financial Officer
Over 20 years of accounting and financial management experience.
Experienced Management Team
6
Mark Brennan, President/CEO and Director
Founding member of Desert Sun Mining with over 20 years financing experience in North America and Europe. Founder and
Principal of Linear Capital, Brasoil Corporation, James Bay Resources, and Morumbi Oil & Gas and former President, CEO and
Chairman of Admiral Bay Resources.
Dirk Donath, Director
Senior Managing Director and Partner at Eton Park Capital Management, responsible for Eton Park’s private equity and direct
investment activities in emerging markets. Eton Park is a global, multi-disciplinary investment fund with a capital base of over
US$14 billion.
Dan Ioschpe, Director
Mr. Ioschpe is currently Chief Executive Officer of Lopche-Maxion, an international company operating in the automotive and railroad sectors..
Alberto Arias, Director
Founder and President of Arias Resource Capital Management. He worked for Goldman Sachs & Co and was ranked for five
consecutive years as the #1 Equity Research Analyst for the metals and mining industry in Latin America. Prior to Goldman Sachs,
he worked at UBS as Executive Director and Analyst covering the Latin American mining sector.
David Brace, Director
Mr. Brace is currently Chief Executive Officer and a director of Karmin Exploration and a director of Viking Gold Exploration Inc. Mr. Brace previously served as President of Lambton Capital Inc., a private investment firm focused on evaluating mining investments. He has also served as the Chief Executive Officer and as a director of Globe Star Mining as well as Executive Vice-President of Business Development with Aur Resources Inc. until August, 2007.
Wayne Egan, Director
Mr. Egan is a partner at the law firm of WeirFoulds LLP and acts for several public companies on the TSX and TSX Venture Exchange.
Dr. Alan Alper, Director
Dr. Alper is an accomplished senior executive, with 30 years of experience at Osram Sylvania, Inc., formerly GTE Sylvania.
Strong Board of Directors
7
Vanadium
8
Vanadium Uses: Steel Drives Demand
*Roskill Information Services Ltd
** Byron Capital Markets. 9
Long Term Vanadium Pricing
10 * Source: Metal Bulletin
Tungsten
11
Tungsten Uses: Supply Constraints Drive Pricing
Strategic metal with highest melting point of all metals
12
*
Long Term Tungsten Pricing
13 * Source: Metal Bulletin
Maracás Vanadium Project
14
Maracas “Base Case” Operating Parameters*
15
Mineral Reserve: 13.1 million tonnes @ 1.34% V2O5
Mineral Resource: 24.6 million tonnes @ 0.83% V2O5 (M&I)
30.4 million tonnes @ 0.83% V2O5 (Inferred)
Average Annual Production (years 1-5) 9,200 tonnes of vanadium pentoxide (V2O5)
Vanadium Pentoxide Price: $6.46 per lb, or $14.24 per Kg (3 year average)
Average Vanadium Pentoxide Operating Costs
$3.12 per lb
IRR and NPV (after taxes, royalties and including sustaining capex)
IRR of 22.4% and NPV of US$274 million (8% discount rate)
Initial Capital Costs: $230,347 ($USD millions)
USD/BR$ Exchange Rate: 2.00
Glencore International Off-take Agreement:
Take or Pay contract for 100% of vanadium products for first 6 years
* As outlined in “Technical Report for the Largo Maracás Vanadium Project Plant, Brazil” announced September 13th 2012
Maracas Grade and Quality
Deposit Characteristics
Vanadium is contained in magnetite with a
higher iron content than others
Better recoveries, less power required, less
chemicals
concentrate with much higher V2O5, higher
Fe, and lower SiO2 (contaminant) than any
other deposit
LOWEST COST PRODUCTION
*Average grade comparisons compiled by Les Ford, presentation March 8, 2011 16
Highest Grade/Quality Vanadium Deposit in the World
=
=
= Ore V2O5% Concentrate
SiO2%
Concentrate
V2O5%
Maracas Mining Process
17
• Nominal strip ratio 1.95:1
• Deposit outcrops at surface
• Less than 1 meter pre-
stripping
• High grade material from
surface and continues to
depth
Simple, Cost-Effective Open
Pit Mining Process
* As outlined in “Technical Report for the Largo Maracás Vanadium Project Plant, Brazil” announced September 13th 2012
Development on Track
Construction underway and on schedule
Procurement orders 70% complete with
orders placed for all long-lead items: • Kiln
• Sodium sulphate crystalliser
• V2O5 reactor
Earthworks (clearing and filling of earth for
plant plateaus) commenced in June
Civil construction at plant site underway
• Foundations for tanks, piperacks & laboratory and
administration building in progress
Water supply pipeline construction in
progress and on track
Installation of 138 kV powerline underway
Accommodations for Largo staff in Maracás
are complete 18
Maracas Site visit – August 2012
Maracas Process Flow
19
• Designed using “best-practices”
from current low-cost producers
• “Off the Shelf Technology” – no
new processes or technology
• Lower power costs; electricity
and heavy fuel oil
• Lower usage of sodium
carbonte and ammonium
sulphate
• Efficient ramp-up schedule
• First product sold after 7 days from full
commissioning
• 75% production reached by month 6
Proven Low-Cost Process
with Efficient Ramp Up
Maracas Projected Cashflow*
20
Significant Cashflow
Generated from Year 1
* As outlined in “Technical Report for the Largo Maracás Vanadium Project Plant, Brazil” announced September 13th 2012
Technical Report Sensitivity Analysis
21
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000N
P
V
(
U
S
D)
Sale Price (Vanadium Pentoxide)
Project Net Present Value (NPV)
0%
5%
10%
15%
20%
25%
30%
85% 90% 95% 100% 105% 110% 115%
I
R
R
(
%)
Sale Price (Vanadium Pentoxide)
Project Internal Rate of Return
$6.46 $7.36 $5.49
$6.46 $7.36 $5.49
• Current vanadium pricing
perceived to be industry “floor”
• Output cut offs at $5.00 per lb
of V2O5
• US$ based commodity
• Main sources of supply prone
to instablity (South Africa,
Russia, China)
* As outlined in “Technical Report for the Largo Maracás Vanadium Project Plant, Brazil” announced September 13th 2012
Sensitivity to Vanadium Pricing
Technical Report Sensitivity Analysis
22
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
85% 90% 95% 100% 105% 110% 115%
NPV
(U
SD
)
Operating Cost
Project Net Present Value (NPV)
0%
5%
10%
15%
20%
25%
30%
85% 90% 95% 100% 105% 110% 115%
IRR
(%
)
Operating Cost
Project Internal Rate of Return
• Lowest cost producer with
potential to reduce operating
costs further
• Adoption of “owner-crushing”
projected to reduce opex
• Increase in production output
further decreases opex
• PEA to be completed by Q2,
2013 will explore these scenarios
• Anticipated reduction in op-costs
$3.12 $3.59 $2.65
$3.12 $3.59 $2.65
* As outlined in “Technical Report for the Largo Maracás Vanadium Project Plant, Brazil” announced September 13th 2012
Sensitivity to Operating Costs
23
Gulcari “A” Deposit Detail
Maracás concessions
and strike length
Concessions and Mineralization
24
8km
Potential to Expand
Gulcari “A” open pit
(400 m x 450 m)
13,000 Meter Drill Program
Completed in 2012 • Five new satellite deposits delineated
with total Inferred resources of 27.8
MT containing 232,100 tonnes @
0.83% V2O5
• Increased M&I resources at Gulcari
“A” by 1.4 MT
• Total M&I 24.6 MT containing 272,900
tonnes @ 1.11% V2O5
• Increased Inferred resources at
Gulcari “A” by 2.6 MT containing 19,
800 tonnes @ 0.76% V2O5
• Expansion PEA Underway
25
Gulcari “A” deposit is
location of entire Mineral
Reserve
Increase Capacity
26
Increasing capacity by 50% anticipated to
require nominal capital expenditures
relative to projected cashflows
All critical equipment ordered for “base
case” with expanded capacity to minimize
future capital expenditures
Simple ramp-up process to increase
production once plant is commissioned
Agreement with Glencore in place for all
vanadium material produced – includes
potential for increased production
PEA underway exploring expansion
scenario anticipated for Q2, 2014
Also will explore potential to produce both
FeV and vanadium pentoxide
projection
Maracas Cash Flow Projections
Maracas: Catalysts for Growth
Year 1 = Current production parameters
Year 2 = Sale of tailings material (pig-iron)
Years 4+ = 50% increase in production capacity
27
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 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.
•Projections assumes FeV pricing of $28.00 per Kg
Implementation Summary Highlights
28
Commercial Production Commenced December
2011
90 tonnes of concentrate shipped
Initially commissioned without mill due to
importation delay at port
Mill commissioned in February
Plant optimization proceeded to adjust milling
circuit
3 additional screens were added in order to
increase yields
Screens presently being commissioned
Undergoing minor modifications to plant
Production temporarily suspended due to severe
regional drought
Full production anticipated by February, 2013
3 shipments per month (54 tonnes of
concentrate)
Currais Novos Site Visit – August 2012
Identify and Acquire Additional Resources
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
of defining additional resources
29
Currais Novos Cash Flow Projections
Currais Novos: Catalysts for Growth
Year 2 = Current production parameters
Year 4+ = following 3 year exploration ramp-up on
recently acquired additional underground properties
* Projections assumes exploration success on aditional properties ramp up
30
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 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.
projection
31
Campo Alegre Project
Non NI 43-101 Compliant Resource:
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)
Originally purchased for potential inventory of
vanadium and as stop-gap for acquisition by
potential competitors
Preliminary metallurgical testwork completed in
2011 suggested potential for titanium dioxide
(TiO2) project
Further metallurgical testing underway in 2012
* Historical resource provided by CBPM (Bahia State Mining Development Agency)
14 km x 2.5 km trend
Multiple mag-targets
Historical drill program
only tested to 60 m
Potential expansion at
depth
Mag-survey indicates
fold structure
Campo Alegre: Potential to Expand
32
33
Northern Dancer Project
Northern Dancer Resource Estimate
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)
Development Milestones
PEA complete
Environmental permitting under way
Discussions with off-take partners and
JV partner
Northern Dancer: PEA Highlights
Highlights*
49 year mine life
Positive NPV of US$918 million at $275 MTU APT and an 8% discount rate
Current trading price of US$360 MTU
Low cash cost producer: US$116 per MTU
Cumulative cash flow US$4.8 billion
Average annual production of 833,000 MTU tungsten (18.3 million pounds)
Average annual production of 5,959,000 pounds molybdenum over initial 23 years
Pre-production capital costs: $645 million
Tungsten
(US$ per MTU)
Molybdenum
(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 $17.50 27.8 1,769
* The PEA is preliminary in nature, and includes inferred resources that are too speculative geologically to have economic considerations applied to them.
There is no certainty that the PEA will be realized. 34
35
Northern Dancer: Highlights
IRR and NPV’s at Higher Tungsten Price Points*
* Derived from PEA sensitivity analysis
Tungsten
(US$ per MTU)
Molybdenum
(US$ per lb) IRR (%)
NPV @ 8%
(US$ millions)
$400 $17.50 31.0 2,074
$450 $17.50 35.0 2,500
* ** Roskill: Tungsten Market Outlook, 2012
**
Strategic Development Timeline
36
Largo Resources
@LargoResources1
Largo Resources
37
Darcie Ladd Business Development Manager
416-861-9406
Mark Brennan President and CEO
416-861-9797
Investor Connect
www.LARGORESOURCES.com
55 University Ave. Suite 1101
Toronto, ON – M5J 2H7
Appendix
38
Maracas Commissioning and Ramp Up
Site Development
Maracas Project Infrastructure
Maracas Photo Gallery
Vanadium – Growth in Green Tech
Management Regional Breakdown
Commissioning and Ramp Up
39
1) Run water through all “wet”
machinery to make sure they are
performing to design
• Modify/adjust
2) Kiln warm up period – 7 days prior
to feed being introduced
3) Begin running material through the
plant following process-flow
sequence
4) First salable product will be
available after 7 days from
introduction
5) Ramp up – continually increasing
production until full capacity is
reached
• 75% Capacity at 6 months
1)
2)
3)
4)
5)
Site Development
40
Maracas Project Infrastructure
41
Typical dirt road (20 Km) Access to Porto Alegre
Major road to Porto Alegre turn-off
(30 Km)
Major road leaving Maracás
Photo Gallery
42
Clearing and filling of earth for plateau platforms for plant site Earth removal for laying of concrete foundations for piperacks
Pit area fully cleared Preparing to pour foundations for raw water tanks
Vanadium Redox Storage Batteries
Vanadium Uses: Growth in Green Technologies
Vanadium has shown to increase the
effectiveness of energy storage in traditional
batteries
Mass amounts of energy can be stored
longer and batteries can be re-charged faster
Low-cost, low-volatility, high-performance
batteries
Vanadiu
m A
dvanta
ges
Sto
rage A
pplic
ations
Wind turbines
Solar panels
Backup electrical systems
Hybrid/electric cars
Source: USGS, Byron Capital Markets
Vanadium redox storage batteries are the potential solution to green energy’s storage issues.
43
Voltage with Different Cathodes (v)
4.8
4.1 4.0 3.7 3.6
3.3
Li3V2(PO4)3 LiVPO4F LiMn2O4 LiCoO2 Li2FePO4F LiFePO4
Photo Courtesy of Tesla Motors
Vanadium Uses: Growth in Green Technologies
Vanadium phosphate cathode material can
support 20% more energy storage than
cobalt oxide, 26% more than iron phosphate
and 56% more than manganese oxide,
solving the issue of quick discharge in
electric cars
Highest voltages measured, generating a
more powerful battery
Vana
diu
m
Ad
va
nta
ge
s
Lithium Vanadium Electric Car
The potential demand for electric cars can substantially increase the demand for lithium-ion batteries with cathodes compounded by vanadium.
Source: USGS, Byron Capital Markets 44
Mauro Silva Electrical Engineer
Mauricio Coletti Mining Engineer
Israel Nonato Senior Exploration Geologist
Kurt Menchen General Manager, Brazil
Carlos Lorenzo Environmental Geologist
Les Ford Technical Director of Operations
Eldes Bittencourt Geologist
Management Breakdown
Main Office Location
Mike Henderson Geologist
Mark Brennan President & CEO
Tim Mann, P.Eng. Chief Operating Officer
Robert Campbell, P.Geo. VP Exploration
Kevin Brewer General Manager, Yukon
Brazil
Toronto
Yukon
45
Donald Clarke Mining Engineer
Douglas Herbst Project Manager
John Laurie Chief Financial Officer
Darcie Ladd Manager Business Development
Paulo Vianna Chief of Administration, Brazil
Luciano Chaves Chief of Finance, Brazil