Largo Resources Announces First Quarter 2021 Production And Sales Results; Strong Vanadium Market Fundamentals Continue

V2O5 production of 1,986 tonnes (4.4 million lbs1) in Q1 2021 vs. 2,831 tonnes in Q1 2020; Lower production in Q1 2021 was largely a result of the planned shutdown associated with the Company’s cost-efficient nameplate capacity increase

Commissioning and ramp up of cost-efficient nameplate capacity increase to 1,100 tonnes of V2O5 per month to be completed by the end of Q2 2021

Global V2O5 recovery rate2 of 77.4% in Q1 2021, a 3% decrease over Q1 2020

Total V2O5 equivalent sales of 2,783 tonnes in Q1 2021, a 12% decrease over Q1 2020 mainly due to lower production during Q1 2021

Strong vanadium price increases with main indexes in Europe and U.S. up approximately 30% to 50% in Q1 2021 on the back of solid demand in all key regions

2021 production, sales and cost guidance maintained

Largo Resources Ltd. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) announces first quarter 2021 production and sales results from its Maracás Menchen Mine featuring quarterly production of 1,986 tonnes (4.4 million lbs1) of vanadium pentoxide (“V2O5”) and sales of 2,783 tonnes of V2O5 equivalent.

Paulo Misk, President and Chief Executive Officer for Largo, stated: “Production was largely impacted during the quarter as a result of the planned shutdown to complete the upgrades and improvements associated with the Company’s cost-efficient nameplate increase to 1,100 tonnes of V2O5 per month. The related work for this project concluded in January 2021 and we expect to reach the new nameplate capacity by the end of Q2 2021, following the required commissioning and ramp up phases.” He continued: “Strong vanadium demand in the Company’s key regions has continued in Q1 2021 with solid volume increases in the steel and chemical sectors. This was highlighted by a more than 50% increase in Europe’s average V2O5 price per lb during Q1 2021 as quoted by Fastmarkets Metal Bulletin. As a result of the severe impacts of COVID-19 pandemic, vanadium demand from the aerospace sector continues to lag, but we expect a gradual recovery from Q3 2021 onwards. Overall vanadium demand is expected to remain solid throughout 2021 as stimulus packages linked to the COVID-19 economic recovery are implemented. A continuous focus on global carbon emission reduction will also support the increased use of vanadium in the traditional steel market as well as in the fast-growing long duration energy storage sector. Recent sales of large scale VRFB systems around the world is further confirming the adaptation of this technology and we remain extremely focused on developing our clean energy division to service to this market with our VCHARGE± battery.”

Q1 2021 Production Results

Total production from the Maracás Menchen Mine was 1,986 tonnes of V2O5, representing a decrease of 30% over Q1 2020. This reduction is largely a result of the planned shutdown to implement upgrades to the kiln and improvements in the cooler. During this shutdown, the Company increased its intermediate stockpiles which is expected to benefit production in the next quarter. Following the commissioning and ramp up phase, these upgrades are expected to increase the Company’s nameplate capacity to 1,100 tonnes of V2O5 per month by the end of Q2 2021. The Company also conducted a preventative maintenance program downstream of the kiln and cooler during this downtime.

In Q1 2021, 263,966 tonnes of ore with an effective V2O5 grade3 of 1.22% were mined compared to 203,966 tonnes in Q1 2020 with an effective V2O5 grade3 of 1.61%. The Company also produced 100,467 tonnes of concentrate ore with an average V2O5 grade of 3.21% in Q1 2021 compared to 100,072 tonnes in Q1 2020 with an average V2O5 grade of 3.36%.

The Company achieved a global V2O5 recovery rate2 of 77.4% in Q1 2021 representing a decrease of 3.0% over Q1 2020 (79.9%). This is primarily due to the planned shutdown in January 2021 and the subsequent commissioning and ramp up activities in February and March 2021. These activities are expected to conclude by the end of Q2 2021 at which point the Company expects the global recoveries2 will return to levels achieved in 2020.

COVID-19 Preventative Measures

The Company continues to monitor the evolving COVID-19 pandemic and has taken preventative measures at its mine site and corporate offices to mitigate potential risks. Although there have been some challenges with logistics, there continues to be no significant impact on the Company’s production or on the shipment of products out of Maracás. To date, there continues to be no significant disruption to the Company’s supply chain for its operations and the level of critical consumables continues to be at normal levels. In addition, the restrictions imposed by the government in Brazil have not significantly impacted operations. The Company continues to follow the recommendations provided by health authorities and all corporate office personnel have been instructed to work from home where possible. The Company continues to staff critical functions at the Maracás Menchen Mine and has encouraged those in non-essential roles to work from home.

The Company’s 2021 guidance is presented on a “business as usual” basis. The Company continues to monitor measures being imposed by governments globally to reduce the spread of COVID-19 and the impact that this may have on the Company’s operations, sales and guidance for 2021. Although these restrictions have not, to date, had a material impact on the Company’s operations and sales, the potential future impact of COVID-19 both in Brazil and globally could have a significant impact on the Company’s operations, sales efforts and logistics. The Company is continuing to monitor the rapidly developing impacts of the COVID-19 pandemic and will take all possible actions to help minimize the impact on the Company and its people. However, these actions may significantly change the guidance and forecasts presented and will, if and when necessary, update its guidance accordingly.

About Largo Resources

Largo Resources is an industry preferred, vertically integrated vanadium company. It services multiple vanadium market applications through the supply of its unrivaled VPURE™ and VPURE+™ products, from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine located in Brazil. Largo is also focused on the advancement of renewable energy storage solutions through its world-class VCHARGE± vanadium redox flow battery technology. The Company’s common shares are listed on the Toronto Stock Exchange under the symbol “LGO”.

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