Largo Announces Termination and Waiver of March and June 2017 Capitalization Requirements, Respectively, by Brazilian Banks

TORONTO, July 12, 2017 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQB: LGORF) is pleased to announce that, further to its release of March 15, 2017, effective June 30, 2017 the syndicate of Brazilian commercial lenders (the "Lenders") under the Company's existing debt facilities have agreed to (i) terminate the US$5 million March 2017 capital injection requirement which has been the subject of a temporary waiver since March 15, 2017 (See Company's press release of same date), and (ii) postpone the additional US$5 million June 2017 capitalization requirement until December 31, 2017.The March 2017 and June 2017 capitalization requirements had initially been required by the Lenders in connection with the entering into of the 2017 Facilities in January (see the Company's press release of January 9, 2017).The Lenders have further agreed that if the Company complies with the Payment Obligation (as defined below) then on December 31, 2017, the June 2017 capitalization requirement will also be terminated.

In consideration for the termination of the March 2017 capitalization requirement and the postponement (and possible subsequent termination) of the June 2017 capitalization requirement, the parties have agreed as follows:

• Van??dio de Marac??s S.A. (the "VMSA"), the Company's operating subsidiary, will pay, out of cash flow from operations, an aggregate of approximately CDN$13 million in amounts owing to the Lenders over the course of 2017, payment of which amounts had previously been postponed (the "Payment Obligation");
  
  
• Disbursements by the Lenders under the 2017 Facilities will be reduced if the price of vanadium pentoxide exceeds certain thresholds over a 12 week trailing period as follows:

• US$5.49/lb or less - no change to disbursement;
• between US$5.50/lb and US$5.99/lb - 10% reduction in disbursement;
• between US$6.00/lb and US$6.49/lb - 20% reduction in disbursement;
• between US$6.50/lb and US$6.99/lb - 40% reduction in disbursement;
• between US$7.00/lb and US$7.49/lb - 60% reduction in disbursement;
• between US$7.50/lb and US$7.99/lb - 80% reduction in disbursement; and
• US$8.00/lb or greater - no disbursement.

• The previously semi-annual cash sweep payment obligation will now become assessable on a quarterly basis.

Mark Smith, President and Chief Executive Officer for Largo, stated: "As a result of our continued success with operations, our partners now agree that for so long as we meet the payment obligations, additional cash injections into VMSA are no longer required.In addition, VMSA has now started to pay down some of the obligations owing to the Lenders. This is a great result for Largo and we look forward to continuing to work with the Lenders to ensure the success of the Company."

About Largo

Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium pentoxide at its Vanadio de Marac??s Menchen Mine. 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. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to grow 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. For more information, please visit www.largoresources.com.

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. 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.

NEITHER THE TORONTO STOCK EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCELargo Resources Ltd.

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