TSXV: LGO Best Mining Deal www.largoresources.com Near Term VANADIUM Producer March 2014 CORPORATE PRESENTATION Metals and Mining Deal of the Year
Jun 19, 2015
TSXV: LGO
Best Mining Deal
www.largoresources.com
Near Term VANADIUM Producer
March 2014
CORPORATE PRESENTATION
Metals and Mining Deal of the Year
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
or legally mineable.
2
TSXV: LGO 3
Production in sight.
As at October 10, 2013
Project as at February 20, 2013
TSXV: LGO
Maracas Vanadium Project
Vanadium Project in Brazil
Highest grade, quality; lowest cost project
Funded and in construction
Commissioning in Q1, 2014
Glencore Off-take: 100% Take-or-Pay
4
Metals and Mining
Deal of the Year
Best Mining Deal
Recent Construction Milestones
Electrical power line commissioned Oct/13
Crushing commissioned Oct/13
Milling & beneficiation commissioned Feb/14
TSXV: LGO
Vanadium – a Strategic Metal
Most used alloy to strengthen steel
Significantly increases tensile strength
Resistant to: seismic, corrosion, abrasion
Proven process for separation
5
Makes steel stronger, tougher and lighter
Source: vanitec.org/Roskill, 2013
TSXV: LGO
Vanadium – Few Substitutes
6
2lbsV 1 Tonne of Steel 2X
Strength
Highest strength to weight ratio of any alloy
Source: vanitec.org
TSXV: LGO
Uses of Vanadium
7Source: 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
TSXV: LGO 8
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
TSXV: LGO
Vanadium Demand Drivers
Increased use in steel
Growth in applications containing V
Higher quality steel standards in BRICs
9
Strong growth profile
Source: Roskill, 2013
TSXV: LGO
Growth Example: Asia Developing
10
By 2020 Asian construction spending is
forecast at 46% of global – outstripping
European spending by 24%
Chinese construction sector will expand
between 4.5% - 7.5% between 2016 - 2021
Strongest construction spending growth
expected to be in China, followed by India and
Indonesia
Source: Roskill, 2013 Source: Vanitec
TSXV: LGO
Growth Example: China
11
“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 of 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)
TSXV: LGO
Growth Example: China
12Source: Les Ford Vanadium and Steel presentation, PDAC 2010Source: Roskill 2013
% of Vanadium Used per Tonne of Steel by Region
Tota
l To
nn
es
by R
eg
ion
(V
2O
5 E
qu
iv.)
Projected Impact of China’s Increased Rebar Standards
Actual Consumption 2010
Projected Impact of China’s 2013 Rebar Standards
Japan
Europe
China
TSXV: LGO
China/U.S. Construction Trends
13
China and USA: Forecast Growth in Construction 2012 - 2021
Source: Roskill, 2013 Source: Oxford Economics
China and USA: Forecast Growth in Construction
TSXV: LGO
Growth Example: Automobiles
14
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 make 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
TSXV: LGO
Projected Growth in Automotive
15
47%
22%
40%
78% 41%
12%
10%
50%
USA: Consumption Growth of High-Strength Steels in Automobiles %
Source: Roskill, 2013 Source: US Steel
TSXV: LGO
Growth Example: Aircraft
16
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 the alloy,
more than double that in a Boeing 747
Air traffic is forecast to double over the next 15
years
Source: Largo Source: www.asiaminer.com Source: TTP Squared
TSXV: LGO
Projected Growth in Aircraft
17Source: Roskill, 2013 Source: Airline Monitor
TSXV: LGO
Supply is Concentrated
18
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
TSXV: LGO
Vanadium Historical Pricing
19
Consistent floor at $5.00 per lb
Largo Operating Costs
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Maracas – Ideal Location
20
Mining friendly jurisdiction
Government and local support
Arid climate, ideal topography
Management with regional experience
Strong tax incentives
Local familiarity with mining
Metals and Mining
Deal of the Year
Best Mining Deal
TSXV: LGO
Concessions and Mineralization
= Gulcari “A” Deposit (first 12 Years)
Maracás concessions
and strike length
21
TSXV: LGO
Mineral Resources
22
+2 Times Industry Average Grade
30.4 Million Tonnes
24.6 Million Tonnes
Gulcari “A” Deposit
TSXV: LGO
Gulcari “A” Cross Section
23
TSXV: LGO
Cost Advantage
*Average grade comparisons compiled by Les Ford, presentation March 8, 2011 24
Highest Grade/Quality Vanadium Deposit in the World
Ore V2O5% Concentrate SiO2%Concentrate V2O5%
Higher head-grade and higher iron content
Concentrate has much higher V2O5
Concentrate has fewer
contaminants like silica
=LOWEST
COST PRODUCTION
Higher Recoveries
Less Energy Required
Lower reagent costs
Results in
TSXV: LGO
Maracas Project Economics*
25
*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
TSXV: LGO
Low Cost Environment
Open pit mining
At surface deposit
Highly magnetic ore
Few contaminants
Water leaching process
26
Ore provides better recoveries and reduces input costs
*including iron ore byproduct credit - OPEX without credit is $3.18 (still lowest cost producer)
TSXV: LGO
Low Cost with Potential to Improve
Lower mining costs
Lower power costs
In-house crushing
Depreciation of the Real
27
Expected reductions in operating costs
*including iron ore byproduct credit - OPEX without credit is $3.18 (still lowest cost producer)
OPEX costs*
TSXV: LGO
Vanadium Historical Pricing
28
Profitable at historic lows
Largo Operating Costs
TSXV: LGO
Process Flow Sheet
29
Proven, industry tested process
TSXV: LGO
Production Profile
30
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
TSXV: LGO
Year 1 Ramp-up Projections
31
Conservative Ramp-Up
Projections with Opportunity to
Improve
Year 1 Total: 5,511 Tonnes V2O5Year 2 Total: 9,689 Tonnes V2O5
Plant Capacity: 10,000 Tonnes V2O5
100%
% C
apac
ity
TSXV: LGO
Strong Partners
Glencore International Plc.
Largest trader of Vanadium
Take-or-pay agreement
100% of all material produced
32
De-risked product sale
TSXV: LGO
Strong Management
33
Mark Brennan President & CEO 20+ years experience in capital markets
Michael Mutchler Chief Operating Officer 20+ years mining engineering experience operating and managing mines
Les Ford Technical Director Vanadium expert. 40+ years experience building/designing vanadium plants
Kurt Menchen Country Manager & Maracas Project Manager
30+ years mining engineering experience operating mines in Brazil
Douglas Herbst Maracas Construction Manager
30+ years mining engineering experience building mines
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 10+ years experience in corporate Law
Significant experience constructing and operating mines
TSXV: LGO
Maracas Environment
34
Gulcari “A” Open Pit
Main Access Road
Admin Facilities
Roasting (kiln)
Crushing
1 km
MillingLeaching
DesilicationPrecipitation
Final Product
Project as at December 11, 2013
Tailings
Tailings
TSXV: LGO
Maracas Deposit Outcrop
35
25 meters of ore at surface
150 meters
Magnetite(ore)
Gabbro (waste)
◦Dips at 65
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Maracas Construction
36
Project as at February 20, 2013
TSXV: LGO
Recent Construction Milestone
37
Crushing Circuit successfully commissioned
Above: Crushed ore stockpile, January 2014
TSXV: LGO
Recent Construction Milestone
38
Installation of kiln shells – December 2013
Above: Final kiln shell being installed, December 2013
TSXV: LGO
Recent Construction Milestone
39
Commissioning of milling and beneficiation system – February 2013
Above: main ball mill being commissioned
TSXV: LGO
Corporate Structure
40
Stock symbol: LGO – TSX-V
Share price (Feb 27, 2013): $0.28
Shares issued (Basic): 982 million
Market Cap C$275 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
TSXV: LGO
Secondary Projects
41
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
TSXV: LGO
Investment Summary
Project funded, permitted and in construction
Project commissioning in Q1, 2014
High grade, low cost production project
Significant cash-flow potential in near-term
Exposure to commodity with strong growth profile
Experienced management
Pipeline of projects in place for growth
42
Substantially de-risked flagship project with near term cash flow
Under-Valued
Near-Term Producer
Project as at November 19, 2013Project as at December 26, 2013Project as at February 20, 2013
TSXV: LGO 4343
Darcie LaddBusiness Development
Manager
416-861-9406
Mark BrennanPresident and CEO
416-861-9797
LARGORESOURCES.COM
Largo Resources
LargoResources1
Largo Resources
largoresources
TSXV: LGO
Appendix
Board of Directors
Maracas Mining Process
Tungsten
Currais Novos
Northern Dancer
Campo Alegre de Lourdes
44
TSXV: LGO
Appendix: Strong Board
45
Mark Brennan Director Largo Resources President & CEO
Dirk Donath Director Managing director Eton Park 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 AurResources
Wayne Egan Director Partner at Weir Foulds LLP
Dr. Alan Alper Director Tungsten expert. Formerly with Osram Sylvania
TSXV: LGO
Appendix: Maracas Mining Process*
46
• Deposit outcrops at surface
• Less than 1 meter pre-stripping
• High grade material from
surface continues to depth
Simple, Cost-Effective Open
Pit Mining Process
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
TSXV: LGO
Appendix: Tungsten
47
Tungsten [W74]
Tungsten is unique in its extreme
qualities and difficult to replace
Source: Roskill, 2011Source: Minor Metals Trade Association
Cemented Carbide Usage
• Only diamonds are harder• 100X harder than steelVery Hard
• Highest melting point• Lowest expansion
Very Heat Resistant
• Greater than lead or uraniumVery Dense
TSXV: LGO
Appendix: Tungsten
48Source: British Geological Survey’s Risk List, 2011 Source: US Gelological Survey
Supply Demand
Source: Roskill, 2011/Europacific Canada, April 12, 2012
Production
17%
Tungsten Scored 4th
Most at Risk out of 52 Elements
67,000 Tonnes(2011)
95,000 Tonnes(2015)
Growingat 7%
per year
Consumption
Projected to increase
TSXV: LGO
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
of defining additional resources
Production Commenced December 2011
Plant optimization continued through 2012
Production temporarily suspended due to
severe regional drought in 2013
49
Operational History:
TSXV: LGO 50
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 $250,000.00 from
Bahia State Mining Development Agency (CBPM)
Preliminary metallurgical testwork completed in
2011 suggested potential for titanium dioxide (TiO2)
project
* Historical resource provided by CBPM (Bahia State Mining Development Agency)
Mineral Resources (non-NI 43-101)
Development Milestones
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Appendix: Northern Dancer Project
223.4 MT grading 0.102% WO3 and
0.029% Mo (M&I)
Higher-grade tungsten and molybdenum zone:
60.3 MT of 0.14% WO3 and 0.045% Mo (M&I)
201.2 MT grading 0.09% WO3 and
0.024% Mo (I)
PEA complete
Environmental permitting under way
Discussions with off-take partners and
JV partner
Development Milestones
Mineral Resources
TSXV: LGO
Appendix: Northern DancerPEA Highlights
Tungsten
(US$ 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.52
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