Largo has recently discovered a new chromite showing on its Capivara Prospect (Figure 1). The Capivara Prospect lies 32 km north of the Campbell pit at the Maracas Menchen Mine. The original objective was to evaluate the known magnetite horizon which includes high grade vanadium values. While evaluating this magnetite horizon, the discovery was made of a number of zones containing chromite layers with fine grained sulphides. Samples have been collected and submitted to the lab with results pending.

The chromite layers have been traced over an area of 3km (north-south) by 0.5 km (east-west). There are at least two zones of chromite layers from 20 to 25 metres wide at surface. These zones lay 400 metres west of the Magnetite horizon that contains vanadium and anomalous platinum. The chromite layers are hosted in a thick ultramafic sequence including olivine gabbro, olivine pyroxenite and dunite. In the zones, the chromite layers consist of fine-grained massive chromite (? 60% chromite) and disseminated sulphides that could potentially contain PGMs. These massive chromite layers are 0.50 metres to 1.0 metre thick separated by material containing lesser chromite (? 10% chromite) and disseminated sulphides.

Robert Campbell, P.Geo., Vice President of Exploration to Largo, commented: "We are very pleased with the discovery of the chromite layers and the possibility of PGM mineralization related to the sulphides. This is similar to other layered intrusions such as Great Dyke, Bushveld and Stillwater. The significance in these layered intrusions is that the ultramafic section hosts the known chromite and PGM deposits. This transition from the mafic section and magnetite horizon to the ultramafic section and chromite layers may represent the ultramafic component to the Rio Jacare Sill or time equivalent."

At present, a ground magnetic survey of the area is 90% complete, mapping and sampling is 60% complete and a gravity survey is set to begin next week. Once the data has been evaluated, targets will be prioritized and followed up with diamond drilling.