Largo Resources Announces Closing of C$10 Million Private Placement Financing

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TORONTO, Oct. 31, 2012 /CNW/ - Largo Resources Ltd. (TSX-V:LGO) ("Largo" or the "Company") is pleased to announce that it has closed its previously announced C$10 million private placement of common shares (the "Offering") through the issuance of 45,454,545 common shares of the Company (the "Common Shares") at a price of C$0.22 per Common Share, all in accordance with the terms contained in a press release dated October 11, 2012.

A syndicate of agents led by RBC Capital Markets and including Byron Capital Markets and Scotiabank Scotiabank Global Banking and Markets as co-leads was paid a fee of C$360,000, being 6% of the aggregate gross proceeds raised in the Offering in excess of $4,000,000.

Largo intends to use the net proceeds of the Offering to acquire the remaining 10% minority interest in Companhia de Maracás, which indirectly holds the Maracás project located in Brazil, that the Company does not already own and for general corporate purposes.

Largo is pleased to announce that funds managed by Arias Resource Capital Management LP (the "ARC Funds") and funds managed by Mackenzie Investments ("Mackenzie") participated as the lead orders in the Offering and acquired a significant proportion of the Common Shares issued in the Offering. The ARC Funds and Mackenzie are insiders of the Company by virtue of their ownership of Common Shares prior to closing.  Upon closing of the Offering, the ARC funds own an aggregate of 173,764,873 Common Shares, representing 19.98% of the issued and outstanding Common Shares. Upon closing of the Offering, Mackenzie holds an aggregate of 137,919,098 Common Shares representing 15.86% of the issued and outstanding Common Shares.

The Common Shares issued pursuant to the Offering will be subject to a regulatory hold period of four months and one day from the date of issuance. The Offering remains subject to final TSX Venture Exchange acceptance of requisite regulatory filings.

The Offering was considered and approved by the board of directors of the Company. J. Alberto Arias, a director of Largo who is also the sole director of each of the general partners of the ARC Funds and indirectly controls Arias Resource Capital Management LP, declared a conflict and recused himself from voting on the Offering. There was no materially contrary view or abstention by any director approving the Offering.

Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the proposed purchase by the ARC Funds and Mackenzie was a "related party transaction". The Company was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Offering in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as neither the fair market value of the securities received by the ARC Funds and Mackenzie nor the proceeds for such securities received by the Company exceeded 25% of the Company's market capitalization as calculated in accordance with MI 61-101.

Largo Resources Ltd. is a Canadian-based mineral resource exploration and development company focused on creating a world leading strategic metals company. Largo currently holds a 90% interest in the Maracás Vanadium Project, a 100% interest in the Currais Novos Tungsten Tailing Project, a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project, all in Brazil, and a 100% interest in the Northern Dancer Tungsten-Molybdenum property located in the Yukon Territory, Canada. The immediate goal of the Company is to develop the Maracás Vanadium Project by the end of Q4, 2013 and to produce WO₃ concentrate from the reprocessing of tungsten tailings from Currais Novos. Largo's skilled management team both in Canada and Brazil are confident in their ability to advance these projects.

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

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

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 the private placement, Largo's development potential and timetable of the Maracas and Currais Novos projects; Largo's ability to raise additional funds necessary; the future price of 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". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. 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. 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.

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SOURCE Largo Resources Ltd.