Largo Reports Measured and Indicated Resource Estimate Including Significant Vanadium Pentoxide High Grade Zone (2% V2O5) at Maracas, Brazil
11/7/2007
Measured and Indicated Mineral Resource of 17.3 million tonnes grading 1.44% V2O5 at $3.50/lb V2O5 and using a cut off grade of 0.66%
TORONTO, ONTARIO, Nov 07, 2007 (MARKET WIRE via COMTEX News Network) --
Largo Resources Ltd. (TSX VENTURE: LGO) is pleased to announce a new NI 43-101 compliant mineral resource at its 2,000 hectare Maracas Vanadium-PGM property located 250 kilometres west of Salvador, Bahia, Brazil. The Company has completed a revised block model and updated mineral resource estimate for the Gulcari "A" deposit incorporating the drilling from the 2007 drill program, including 45 holes totalling 11,196 metres. The Gulcari "A" deposit is one of four known prospects hosted at Maracas along a strike length of eight kilometres in the Jacare River Intrusion.
At $3.50/lb vanadium pentoxide (V2O5) and a cut off grade of 0.66%, the Measured and Indicated mineral resource at Gulcari "A" is estimated to be 17.3 million tonnes grading 1.44% vanadium pentoxide (V2O5) and 0.30 g platinum and palladium per tonne. This includes a high-grade magnetite-rich zone of 8.4 million tonnes grading 2.0% V2O5. This high grade zone is very consistent along strike and down-dip. There are no inferred resources included in the estimate.
Largo President & CEO Mark Brennan commented: "Our drilling program has significantly upgraded and expanded the mineral resource confirming the excellent potential for Maracas to meet or potentially exceed the mine operation contemplated in the preliminary economic assessment. The new resource estimate will form the basis for a revision of the previously released economic assessment prepared by Micon International Limited ("Micon"), including platinum and palladium and the previously reported results of metallurgical testwork. This study will form the basis for a decision on proceeding with the preparation of a bankable feasibility study".
The updated mineral resource estimate is based on the assumptions reported in the preliminary economic assessment (see press release June 7, 2007) prepared by Micon International, with the exception of the cut off grade which has been changed to 0.66%. In the preliminary economic assessment, Micon International estimated the inferred mineral resources to be 15,030,000 at a grade of 1.35% V2O5 at a cut off grade of 0.35%. The resources would be mined by open pit methods at 2,000 tonnes/day, milled at an onsite facility and 65% of the contained V2O5 metal value is projected to be payable after processing charges. This scenario results in the production of approximately 5,000 tonnes per year (tpa) of 80% ferrovanadium alloy over the first ten years of mine life, after which production decreases to approximately 2,000 tpa. The current price of vanadium pentoxide is approximately US$7.80/lb and ferro vanadium is approximately US$19/lb.
Cautionary Statement: Mineral resources that are not mineral reserves do not have demonstrated economic viability. This preliminary assessment is preliminary in nature; it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the results of the preliminary assessment will be realized.
"Our focus at Gulcari "A" has been on definition drilling to bring the inferred resource into the measured and indicated category, which has been very successful. The deposit remains open along strike and at depth so there is excellent potential for further expansion of the resource." stated Andy Campbell, P.Geo., Largo's Vice President of Exploration. He further commented that "While higher grade PGM values are associated with the magnetite-rich zone, drilling at Gulcari 'A" was focussed primarily on vanadium hence it is not clear if this drilling optimally tested the PGM potential. We are now re-focussing our program on PGMs to better assess their nature and distribution as well as outline additional higher grade areas."
Table 1 outlines the Measured and Indicated mineral resource for the Gulcari "A" deposit at a cut-off grade of 0.66% V2O5. Whittle software was used to define a pit shell based on relevant technical and economic parameters. The reported resource is entirely within the pit shell and represents a potential open pittable resource.
Table 1. Measured and Indicated Mineral Resource Estimate for Gulcari "A
"deposit at a cut-off of 0.66% V2O5
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Category Tonnes V2O5 Pt Pd PGM V2O5 Contained
% g/t g/t g/t (tonnes) V2O5 (lbs)
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Measured
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Magnetite zone 2,450,000 2.17 0.39 0.15 0.54 53,300 117,300,000
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Indicated
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Magnetite zone 5,920,000 1.90 0.23 0.11 0.34 112,700 247,900,000
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TOTAL 8,370,000 2.00 0.28 0.12 0.40 166,000 365,200,000
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--------------------------------------------------
Measured
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Magnetite-
Pyroxenite Zone 3,410,000 0.92 0.20 0.06 0.26 31,400 69,100,000
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Indicated
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Magnetite-
Pyroxenite Zone 5,480,000 0.93 0.12 0.07 0.19 50,900 112,000,000
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TOTAL 8,890,000 0.93 0.15 0.07 0.22 82,300 181,100,000
--------------------------------------------------
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GRAND TOTAL 17,260,000 1.44 0.21 0.09 0.30 248,300 546,300,000
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The resources were reported from a block model with Gemcom software and a pit shell optimized with Whittle 4X software using a $US42.23/tonne operating cost (processing and G&A costs).
Table 2 below highlights the potential tonnage of the resource at different cut off grades. Consistent with the preliminary economic assessment, the measured and indicated resource has a cut off grade of 0.66 at a V205 price of $3.50 per pound. V2O5 at $5 is consistent with a cut off grade of 0.459 and at $7.50 is consistent with a cut off grade of 0.306. The current price of vanadium pentoxide is approximately US$7.80/lb.
Table 2. Sensitivity of Maracas Gulcari "A" deposit to cut off grade
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Cut-off Tonnes Contained Pt Pd
Grade (000) Grade Grade V2O5 V2O5 (g/t) (g/t)
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(% V2O5) (%) % Tonnes Pounds (000)
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0.36 22,998 1.25 287,000 632,700 0.20 0.08
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0.46 22,534 1.27 286,000 630,500 0.20 0.08
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0.56 21,172 1.32 279,000 615,100 0.21 0.09
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0.66 17,260 1.44 248,300 546,300 0.21 0.09
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0.76 15,289 1.57 240,000 529,100 0.25 0.10
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0.86 13,329 1.69 225,000 496,000 0.27 0.11
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0.96 11,576 1.82 211,000 465,200 0.29 0.12
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1.06 10,547 1.9 200,000 440,900 0.30 0.12
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1.50 7,604 2.14 163,000 359,400 0.33 0.14
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2.00 4,477 2.35 105,000 231,500 0.36 0.13
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2.50 1,077 2.74 29,500 65,040 0.44 0.10
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3.00 130 3.19 4,100 9,030 0.48 0.08
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The mineral resource estimate has been reviewed and confirmed by
B. Terrence Hennessey, P.Geo. of Micon International Limited. Mr.
Hennessey, who is an independent qualified person as defined under National
Instrument 43-101, visited the site from June 26 to 29, 2006 and April 15
to 16, 2007. The resource estimation procedures and classification used
will be outlined in a technical report by Mr. Hennessey that will be filed
on SEDAR.
Parameters used in estimating the mineral resource are as follow:
- Database consists of 95 diamond drill holes and 21 trenches. Drill hole workspace in Gemcom database includes different tables for drill holes and trenches.
- The resource estimation used a new set of cross- sections constructed in Gemcom every 25m, as appropriate for the drill hole density. These cross-sections are perpendicular to strike of the deposit and parallel with rotated local resource grid to avoid any rotation of block model. New set of plan views also constructed every 10m between 100m elevation and 300m elevation.
- Five major geological domains have been identified for Gulcari A deposit. Geological domains for magnetite, magnetite-pyroxenite and pegmatite entirely constructed within the mineralized portion of the sections. Surrounding gabbro and pyroxenite were partly modeled. Magnetite and magnetite-pyroxenite comprise more than 98% of the deposit. Pegmatite and gabbro are internal waste materials.
- All the solids (geological domains) extended 50m beyond the existing drill holes down dip. In some sections when there were not adequate drill holes, the boundary extends to be geologically compatible with previous and next sections.
- An average of specific gravity calculated for different rock types from 140 intervals in massive and banded magnetite (SG equals 4.45), 202 intervals in magnetite-pyroxenite (SG equals 3.57) and 7 intervals in gabbros (3.09) and pyroxenites (3.40).
- An assay top cut of 3.8 % V2O5 was chosen based on probability plot analysis for the magnetite domain. A top cut of 2.0 % V2O5 was chosen based on the probability plots for the magnetite-pyroxenite domain. For Pt and Pd top cuts were 1000 ppb and 550 ppb respectively in magnetite domain and 620 and 350 in magnetite-pyroxenite domain.
- All assay data composited starting at the collar using cut data from grade capping. All drill hole and trench assay data composited in 5m intervals then updated domain intersections.
- The resource estimates for the magnetite and magnetite-pyroxenite domains were prepared by block model technique using Ordinary Kriging grade interpolation method. The lower cut off grade estimated at 0.66% V2O5 is based on the preliminary economic assessment for the production of Vanadium Pentoxide flake.
- The block size used was 5x5x5m based on drill data spacing and likely requirements for open pittable mine blocks for Gulcari "A" deposit. The model has dimensions of 625m east (125x5 meter blocks), 450 m north (90x5 meter blocks) and 375m vertically (75x5 meter blocks).
- The search volume limits for indicated resource along the X, Y and Z axes were set at ranges of 100, 100 and 60 meters, respectively for V2O5 in magnetite domain and 100, 100 and 55 meters for V2O5 in magnetite-pyroxenite domain.
- The search volume limits for measured resource along the X, Y and Z axes were set at ranges of 35, 20 and 20 meters, respectively for V2O5 in magnetite domain and 33, 33 and 16 meters for V2O5 in magnetite-pyroxenite domain.
Analytical work for the 2007 drill program was carried out by SGS Minerals Laboratory in Belo Horizonte, Brazil, an ISO 9001-2000 certified laboratory. Largo employs a systematic industry standard QA/QC program including standards, duplicates and blanks. The samples were analysed for FeO, Fe2O3, SiO2, TiO2 and V2O5 by the XRF method. Andy Campbell, P. Geo., Largo's Vice President of Exploration, is the Qualified Person responsible for the scientific and technical work for the program as defined under National Instrument 43-101 and has reviewed this press release. Security is maintained at the core logging and sampling facility in a locked warehouse onsite located nearby the town of Maracas.
CONFERENCE CALL:
Largo Resources shall be providing investors with an update of its operations at Maracas, Brasil and Northern Dancer, Yukon, at 11:00AM (EST) on Friday November 9th.
The conference call information is as follows: Local # 416-850-2050 North America# 1-866-850-2050 International# +1-416-850-2050 and the code is: 497425#
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