Symbol: LGO (TSX.V)
www.largoresources.com

TORONTO , Feb. 2, 2015 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to provide its 2015 production guidance and outlook for its Maracas Menchen Mine ("the Maracas Mine") in Bahia, Brazil .

Production Guidance:

2015 is expected to be a transitional year for the Company. Largo has been producing at the Maracas Mine since August 2014 , with ramp-up of production anticipated to take 12 months. As such, the Company's focus for 2015 is on achieving nameplate production capacity in Q3, 2015. Nameplate annual production capacity for the Maracas Mine is 9,634 tonnes of vanadium pentoxide or approximately 26.4 tonnes per day.

Production guidance for 2015 and 2016 is as follows:

(i) Reported operating costs for the Maracas Mine include all royalties, SG&A, sales commissions but excludes CAPEX. The operating costs reported are on a non-GAAP basis. Operating costs reflected are based on the average of the high/low production rates and on a CDN/US dollar exchange rate of 1.27.

(ii) Production numbers for 2016 assume completion of an expansion of the existing facilities by June 2016 which would result in increased production capacity beginning in June 2016. In conjunction with restructuring or extending its debt facilities (see "Debt Facility Restructuring" below), a total CAPEX of approximately CDN$50.0 million will be required over the course of 2015-2016 to expand the facilities beyond the 9,634 tonnes nameplate capacity. Should the Company choose not to move forward with the expansion, and assuming the restructuring or extension of the debt facilities is achieved as described below, CDN$18.2 million in planned CAPEX is expected to be required during 2015-2016

Operating costs are expected to average $4.15 per pound during 2015 and Largo currently expects that operating costs will reach $3.21 per pound in December of 2015.

The Company anticipates that its operating costs per pound will continue to decrease throughout 2015 and 2016 and expects operating costs to stabilize at approximately $2.60 per pound by the end of 2016.

Users of this forward-looking information are cautioned that actual results may vary materially from the targets disclosed. Readers are cautioned against placing undue reliance on this guidance.

Vanadium Outlook:

Vanadium pricing has decreased significantly since January 2014 where it traded at approximately $6.00 per pound and currently remains at a five-year low of approximately US$5 per pound (during the last 10 years Vanadium pentoxide trades have only been reported at or below this level for approximately 177 days). Largo has adjusted its medium-term planning to reflect the current pricing of approximately US$5.00 per pound of vanadium pentoxide. This represents a $1.37 decrease in the price of vanadium since the Company's 2013 Technical Report which utilized the 3 year average (2009-20012) of $6.37 per pound vanadium.

Likewise, given the current weak iron-ore pricing and supply/demand environment, Largo has revised its medium-term planning to exclude the sale of iron ore by-product from the Maracas Mine's 2015 and 2016 estimates.

Largo notes that the iron ore is a natural by-product of the vanadium production process, and requires no additional processing costs. The material that is being produced currently, will be stockpiled and could potentially be sold at a later time.

2015 Objectives:

• Continue to ramp up production capacity to meet Phase 1 annual target capacity in Q3
• Focus on production/operating expense optimization
• Conclude re-structuring or extension of debt obligations
• Begin the process to increase the production capacity beyond the nameplate Phase 1 capacity

Debt Facility Restructuring:

The Company is currently investigating options for facilitating a better balance in the scheduled repayment of its debt obligations to better match its current expectations for production and cash flow.

In particular, Largo is currently engaged in discussions with its lenders in order to re-structure or extend its various debt facilities (the "Facilities") to meet these objectives.

If successful, the result will be to delay repayment under the Company's existing Facilities until production is closer to full and sustainable capacity.

Largo at this time expects that a successful and practical solution to the Facilities repayment schedule will be reached. The Company continues to make all interest payments and has met all other necessary obligations of its Facilities.

Ongoing Disclosures Regarding the Maracas Mine:

The Company will provide updates on its 2015 production, production guidance and operational outlook on a quarterly basis in its 2015 MD&A and quarterly/annual statements, which will be filed on SEDAR and on the Company's website following their release. The Company will also host quarterly conference calls, following the release of its MD&A and quarterly/annual financial statements

Quality Assurance & Quality Control:

Mr. Michael Mutchler , Chief Operating Officer of Largo, and a Qualified Persons under National Instrument 43-101, has reviewed and approved the contents of this press release.

About Largo

Largo (TSX-V: LGO) is a growing strategic mineral company focused on continuing to ramp-up production at its Vanadio de Maracás Menchen Mine.

Largo's Maracás Menchen Mine boasts the highest grade vanadium deposit yet discovered and is expected to be a low cost producer. With an off-take in place with Glencore, Largo is well positioned to become a leading producer of vanadium globally and is expected to generate substantial cash-flows.

Vanadium is primarily used as an alloy to strengthen steel and reduce its weight. Vanadium enhanced steels are used in a vast and growing range of products that are used and encountered every day; including, rebar, automobiles, transport infrastructure etc. With a compound annual growth rate of over 6% for the past several years (Roskill, 2013), vanadium is a bourgeoning commodity which lacks opportunities for investment in the wider market place. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to continue this growth over the medium and long term.

Largo also has interests in a portfolio of other projects, including: a 100% interest in the Currais Novos Tungsten Tailings Project in Brazil ; a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project in Brazil ; and a 100% interest in the Northern Dancer Tungsten-Molybdenum property in the Yukon Territory, Canada .

Largo is listed on the TSX Venture Exchange under the symbol "LGO".

For more information please refer to Largo's website: www.largoresources.com

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Disclaimer

This press release contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to completion of any financings; Largo's development potential and timetable of its operating, development and exploration assets; Largo's ability to raise additional funds necessary; the future price of vanadium, tungsten and molybdenum; the estimation of mineral reserves and mineral resources; conclusions of economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated future production, development and exploration; costs of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; currency exchange rates; government regulation of mining operations; and environmental risks. Generally, forward-looking statements 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", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements 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 Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on SEDAR from time to time. The material factors or assumptions that could potentially impact Largo in drawing conclusions or making forecasts or projections set out in the forward looking information include, but are not limited to:

• the success of Largo's mining, processing, exploration and development activities;
• the accuracy of geological, mining and metallurgical estimates;
• the costs of production;
• the supply and demand for vanadium;
• no significant and continuing adverse changes in financial markets, including commodity prices and foreign exchange rates;
• the supply and availability of concentrate for Largo's processing facilities;
• the supply and availability of reagents for Largo's concentrators;
• the supply and availability of all forms of required energy and fuels at reasonable prices;
• no significant unanticipated operational or technical difficulties;
• the availability of financing for Largo's exploration and development projects and activities;
• market instability affecting Largo's ability to borrow in the capital debt markets at acceptable rates;
• maintaining an optimal debt to cash flow ratio;
• the ability to complete project targets on time and on budget and other events that may affect Largo's ability to develop its projects;
• the availability of personnel for Largo's exploration, development and operational projects and ongoing employee relations;
• maintaining good relations with the communities in which Largo operates, including the communities surrounding the company's Maracas Mine;
• no significant unanticipated events relating to regulatory, environmental, health and safety matters;
• legislative, political or economic developments in Brazil ;
• certain tax matters, including, but not limited to current tax laws and regulations and the refund of certain value added taxes from the Canadian and Brazilian governments; and
• no significant and continuing adverse changes in general economic conditions or conditions in the financial markets.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, 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. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo's annual and interim MD&As.

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SOURCE Largo Resources Ltd.

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