Savvy investors carefully watch for businesses that not only work on growing revenue but also manage their costs and drive them down to grow profit margins.

That is exactly the kind of company that Largo Resources Ltd. (TSX.V:LGO) is aiming to be: A company with growing revenue but low costs. Largo Resources aims to develop world-class mines in the Americas.

Recently, Al Alper Jr. spoke to Mark Brennan, President and CEO of Large Resources Ltd. Mr. Brennan's background is in finance and he brings over 20 years of experience in that industry to Largo Resources. He has plenty of experience as a prolific founder and leader, starting up companies like Desert Sun Mining, Linear Capital, Brasoil and Admiral Bay Resources (and others). "My background is that of an investment banker and venture capitalist then founder. I redirected the activities of Largo and now I'm focused on bringing Largo's projects to fruition. We moved the company from being a gold company into a company that focuses on two elements – Vanadium and Tungsten. Our objective is to have world-class projects as a low-cost producer and have a strong influence in the markets in which we're present."

Their flagship project is the Maracas project, a Vanadium project located in the Bahia state in Brazil. Mr. Brennan reported: "Maracas is the richest Vanadium deposit in the world by a very wide margin of about 2.5-to-1 or 3-to-1, compared to any other producing mine. We're looking to bring this mine to construction in the first quarter of next year."

Right now, Largo is raising approximately $250 million to help fund development of Maracas, which includes $150 million in debt and $100 million in equity. "We expect we will have the financing completed in the next month or so," said Mr. Brennan.

Although $250 million can seem like a lot of money to raise, the prospects look promising. "At current prices, Maracas should generate about $110 million in EBITDA per year," estimated Mr. Brennan. "It's a very, very rich project. Current prices run about $30 per kilo of Vanadium. We have a cash cost of $13.50 [per kilo], which is the lowest by far in the Vanadium world. We expect to produce about 5,000 tons per year and look to expand that as we go forward. We'll look to start production by September of 2012 and it's a 20 year mine life." The 20 year mine life is based on the reserve but there is another 10 million measured and indicated resource which can expand the mine life beyond that.

Mr. Brennan mentioned a few other positive aspects of the Maracas mine: "It's a very easy deposit to mine. We've engaged Les Ford… he's one of the most experienced individuals in the world when it comes to Vanadium and he's working full-time exclusively for Largo. He concurs with our views that this is the cheapest mine to bring into production in the world."

They've received their first permit and have had positive discussions with all levels of government. Infrastructure is present and there aren't any people, so it's easier to move forward on the property without displacement.

"We're very excited about Maracas."

Largo also works in Tungsten and they have two Tungsten-related projects. The Northern Dancer project is their primary Tungsten asset acquired in 2006. "It's 424 million tons and is a lower grade material but we believe we can produce about 22 million pounds of Tungsten per year with about 6 million pounds of Molybdenum per year. And with the cost of production, we would again look to be one of the lowest cost producers in the world."

This is an early stage project with initial assessments this fall and a feasibility study in 2011. "We anticipate the project will be in production in 2015 or 2016. There's still a lot of work to be done but we're very excited by it," said Mr. Brennan.

"In the interim we're looking at bringing in other Tungsten assets. We're looking to rehabilitate a historic Tungsten mining area."

This is an exciting opportunity for Largo, especially in the face of the competition. Mr. Brennan explained: "As you're probably aware, the Chinese control about 85% of the global Tungsten market. It's now illegal for the Chinese to export raw materials. There is a lot of concern in the west about Tungsten supply."

So, with that in mind, Largo's Currais Novos project is "starting with a tailing operation of about 4 million tons. We expect to start construction in October and be in production by the end of the first or early in the second quarter of 2011.  The project will generate substantial amounts of cash flow to Largo – somewhere between $6 million and $9 million per year. It's a very lucrative property for us."

"We have a couple of other early stage projects, too," added Mr. Brennan.

All investments have risks and Mr. Brennan reflected on the risks that his company may present to investors. "On the Vanadium projects, the risk is [lack of] financing but we're making very good progress there."

So, why might investors be interested in Largo? We think that Largo’s growing revenue base with low costs is a compelling business model. Mr. Brennan added his own thoughts: "We're going to be bringing a very rich project into fruition and our shareholders are going to benefit from that. The fundamentals for Tungsten look extremely attractive."

Largo is led by experienced leaders and they've identified some exciting opportunities. And now, with low operating costs, they're bringing those opportunities into production.

REFERENCES

http://www.largoresources.com

Largo Resources Ltd

65 Queen Street West, Suite 820, P.O. Box 71

Toronto, Ontario

Canada M5H 2M5

Tel: 416-861-5886info@largoresources.com

Dr. Alper is on Largo’s Advisory Board and he and his family have invested in Largo Resources.