Q2 2018 Highlights
(unless otherwise noted, all financial amounts in this news release are expressed in Canadian dollars)

• Net income of $90.7 million and earnings per share of $0.17 after a deferred income tax recovery of $45.6 million
• Revenues of $103.3 million in Q2 2018, a 189% increase over Q2 2017 and a 13% increase over Q1 2018
• Cash provided before non-cash working capital items of $77.7 million in Q2 2018, an increase of $66.7 million over Q2 2017
• Total production of 2,458 tonnes of V₂O₅ in Q2 2018, a 13% increase over Q2 2017 and an 11% increase over Q1 2018
• Average Vanadium Pentoxide (V₂O₅) price of ~US$15.44/lb V₂O₅ in Q2 2018
• Cash balance at June 30, 2018 of $84.2 million (excluding restricted cash of $201.2 million)

TORONTO, Aug. 13, 2018 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQX: LGORF) is very pleased to report record net income of $90.7 million ($0.17 per share) and cash flows provided before non-cash working capital items of $77.7 million on revenues of $103.3 million in the three-month period ended June 30, 2018..

Mark Smith, President and Chief Executive Officer for Largo, stated: "We are extremely pleased with our financial and overall operational performance during the second quarter of 2018.  In continuing the success of Q1 2018, Largo recognized revenues of $103.3 million during the quarter and achieved net income of $90.7 million, including a non-cash deferred income tax recovery of $45.6 million.  Importantly, because of this ongoing strong performance, our net debt level as at June 30, 2018 was approximately $115 million, or approximately US$87 million)."¹

He continued: "The Maracás Menchen Mine continued to produce strong results operationally during the second quarter of 2018. Our operations team continues to focus on implementing improvements in maintenance and production practices. The Company's consistent low cash costs combined with the continued strengthening of V₂O₅ prices makes Largo one of the most profitable vanadium producers in the world."

Total production at the Maracás Menchen Mine in the second quarter of 2018 was 2,458 tonnes of vanadium pentoxide ("V₂O₅") compared to 2,214 tonnes of V₂O₅ in the first quarter of 2018, and 2,183 in the second quarter of 2017. The Company also achieved a new daily average production record in the month of June with 29.4 tonnes of V₂O₅ produced per day.

The global recovery rate (from ore to flake) averaged 79.2% in the second quarter of 2018, representing an increase of 4.3% over the first quarter of 2018 and 6.6% over the second quarter of 2017. Higher global recovery rates for the quarter are primarily due to greater operational control of the kiln and cooler. The Company forecasts an overall recovery rate of 79% for the remainder of 2018.

Maintenance performed during May as a result of the national truckers' strike in Brazil allowed the operations team at the Maracás Menchen Mine to replace the flaking wheel, assess the furnace refractory, change the de-ammoniator wires in the fusion section, and complete minor repairs to the kiln and cooler refractory. Further, the Company has postponed the planned seven-day shutdown to replace the refractory in the cooler and kiln to fourth quarter of 2018.

Total sales of high purity V₂O₅ flake was 420 tonnes in the second quarter of 2018, representing a 5% increase from the first quarter of 2018 and brings the total high purity sales in the six months ended June 30, 2018 to 820 tonnes. This represents a significant increase from the 205 tonnes sold in the during the full year of 2017. In addition, the Company expects to complete the ramp up to handle and pack high purity V₂O₅ powder.

Consolidated Q2 2018 Financial and Operational Results

Financial
All financial figures are in Canadian dollars unless otherwise stated.

Operational

Second Quarter 2018 Financial Results

The Company reported net income of $90.7 million or $0.17 earnings per share in the second quarter of 2018, continuing the strength shown in Q1 2018. The Company recorded net income before tax of $50.3 million in the second quarter of 2018 and net income of $90.7 million after the recognition of a deferred income tax recovery of $45.6 million.

The Company also reported record revenues for the quarter of $103.3 million, compared to $35.8 million in the second quarter of 2017 and $91.1 million in the first quarter of 2018. The significant increase in revenues over the second quarter of 2017 is attributable to an increase in V₂O₅ prices. The average price per pound of V₂O₅ was approximately US$15.44 for the second quarter of 2018, compared to approximately $5.76 for the second quarter of 2017.

Cash provided before non-cash working capital items was $77.7 million in the second quarter of 2018, representing a 25.5% increase over the first quarter of 2018 and compared to $11.0 million in the second quarter of 2017.

Cash operating costs decreased from the first quarter of 2018 by 4% to $4.97 (US$3.85) per pound of V₂O₅ in the second quarter of 2018. The cost per pound for the second quarter of 2018 was lower when compared with the first quarter of 2018 primarily due to the higher production level and actions taken to control the issues encountered with the cooler refractory. The consequent production stability resulted in lower specific consumption of sodium carbonate and fuel for kiln roasting during the quarter and the Company executed a new agreement for the supply of ammonium sulphate in April, reversing the increase seen in the first quarter of 2018 due to an underlying rise in the price of ammonia gas and sulphur.

The overall benefit of the increased revenues was tempered by increases in corresponding royalty expenses and certain largely non-cash foreign exchange adjustments required as a result of the weakening of the Brazilian Real against the USD (and given that certain of the Company's debts in Brazil are denominated in USD).

Secured Note Offering and Subsequent Repayment of Brazilian Debt

The Company announced in May that it had completed the private placement offering of US$150,000 aggregate principal amount of senior secured notes due in 2021 with a coupon of 9.25%. In addition, the Company announced that on August 2, 2018, it had repaid in full its indebtedness with the Brazilian National Economic and Social Development Bank and its remaining credit facilities held with a syndicate of commercial lenders (see press release dated August 2, 2018). The repayment represents a fundamental step in the Company's development and will allow Largo to realize the benefits of its recently completed note offering through the improvement in capital structure, reduction in interest costs and the simplification of reporting obligations.

Conference Call

Largo Resources management will host a conference call on Thursday, August 16, 2018, at 10  a.m. EDT, to discuss both operational and financial results for the second quarter of 2018.

Conference Call Details:

A playback recording and webcast slides will be available on the Company's website for a period of 60-days following the conference call and webcast.

The information provided within this release should be read in conjunction with Largo's unaudited condensed consolidated interim financial statements and management's discussion and analysis for the six months ended June 30, 2018, which are available on our website at www.largoresources.com and on SEDAR.

About Largo Resources

Largo is a Toronto-based strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás Menchen Mine located in Bahia State, Brazil. The Company's common shares are principally listed on the Toronto Stock Exchange under the symbol "LGO". For more information on Largo, please visit our website at www.largoresources.com.

Forward Looking Information

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 timing for and completion of the Maracás Menchen Mine expansion project and the costs associated therewith; Largo's development potential and timetable of its operating, development and exploration assets; Largo's ability to raise additional funds as may be necessary; the future price of vanadium; the estimation of mineral reserves and mineral resources; conclusions of economic evaluations; 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.

SOURCE Largo Resources Ltd.

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