Tungsten: An Industrial Metal with an Unstable Supply

LARGO RESO URCES TSX-V: LGO 7NGSTEN 74 AN INDUSTRIAL METAL WITH AN UNSTABLE SUPPLY PRICES ARE DRIVING UPWARDS AND NEW OPPORTUNITIES ............................................................ TUNGSTEN ARE EMERGING. 183.84 TUNGSTEN IS UNIQUE IN ITS EXTREMES DIFFICULT TO & REPLACE MOHS SCALE OF HARDNESS DIAMONDS CEMENTED CARBIDE STEEL VERY HARD A) CEMENTED CARBIDE, A PRODUCT OF TUNGSTEN, IS 100 TIMES HARDER THAN STEEL. THE ONLY NATURAL 10 09 04 MINERAL THAT IS HARDER IS A DIAMOND IRON 1808 °C uduuduul VERY HEAT RESISTANT TUNGSTEN 3422 °C NICKEL 1726 °C HIGHEST MELTING POINT 3422 °C AND LOWEST COEFFICIENT OF EXPANSION OF ALL METALS VANADIUM 2448 °C TITANIUM 2206 °C C VERY DENSE 19.25 11.342 18.95 GREATER THAN LEAD OR URANIUM TUNGSTEN LEAD URANIUM D ENVIRONMENTALLY BENIGN VERY RESISTANT TO CORROSION AS A RESULT, TUNGSTEN CAN BE RECYCLED AND COMPLETELY NON-TOXIC VERY EFFICIENTLY USES OF TUNGSTEN AREAS OF INDUSTRY. DUE TO ITS EXTREME PROPERTIES, IT HAS BECOME CRUCIAL IN MANY TUNGSTEN IS WIDELY KNOWN FOR ITS USE IN LIGHT BULBS, BUT ONLY ABOUT 4% OF THE ANNUAL TUNGSTEN PRODUCTION IS CONSUMED BY THE LIGHTING INDUSTRY. OTHER .................. 20% 17% TUNGSTEN IS MANUFACTURED TO MAKE STEELS/ALLOYS CEMENTED CARBIDE 55% MILL PRODUCTS 10% 38% 074 14% AUTOMOTIVE GENERAL WEAR PARTS ELECTRONICS MINING & CONSTRUCTION 02% 14% AEROSPACE & DEFENSE OTHER OIL AND GAS 15% DUE TO CEMENTED CARBIDE'S MILITARY AND DEFENSE APPLICATIONS, MANY GOVERNMENTS VIEW TUNGSTEN SUPPLY AS A MATTER OF NATIONAL SECURITY. GROWTH AND INDUSTRIALIZATION IN CHINA AND OTHER DEVELOPING COUNTRIES WILL INCREASE DEMAND BY ALMOST 6% PER YEAR UNTIL 2016. SUBSTITUTING ANOTHER MATERIAL FOR TUNGSTEN IN THE MANY OF ITS APPLICATIONS WOULD RESULT IN INCREASED COST OR A LOSS IN PRODUCT PERFORMANCE. CHINA'S APROXIMATE SHARE CHINA'S SIGNIFICANT INFLUENCE ON TUNGSTEN SUPPLY AND PRICE 2/3 OF THE WORLD'S RESERVES WORLDS LARGEST: O PRODUCER CONSUMER O EXPORTER ACCORDING TO THE BRITISH GEOLOGICAL SURVEY'S RISK LIST (2011) RISK LEVELS DUE TO CHINA'S SUPPLY DOMINANCE: TUNGSTEN RARE EARTHS TUNGSTEN SCORED 4TH MOST AT RISK OUT OF 52 ELEMENTS 10 WORLD MINE PRODUCTION [TOTAL: 72,100 TONNES] 2011 AUSTRIA 1100 BOLIVIA 1200 CANADA 2 000 CHINA 60 000 PORTUGAL 1300 RUSSIA 3 100 OTHER 3 400 CHINA'S DOMESTIC CONSUMPTION CHINA'S SUPPLY TO THE GLOBAL MARKET CHINA'S INCREASING TUNGSTEN CONSUMPTION HAS RESULTED IN STEADILY DECREASING EXPORT QUOTAS 40 000 35 000 30 000 25 000 ........... 20 000 THIS IS A PROBLEM, BECAUSE THEY PROVIDE MORE THAN HALF OF THE GLOBAL MARKET'S SUPPLY 15 000 10 000 5 000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 PRICE OF TUNGSTEN PRICE COMPARISON TUNGSTEN - MOLYBDENUM - THIS HAS A SIGNIFICANT AFFECT ON TUNGSTEN PRICES... COBALT - NICKEL ONGOING REDUCTION OF CHINESE TUNGSTEN EXPORTS 500 200 CHINA INCREASING DOMESTIC CONSUMPTION 400 150 300 100 WHICH ARE DIVERGING AWAY FROM OTHER METALS" PRICES 200 GLOBAL 50 100 RECESSION 2004 2005 2006 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 TUNGSTEN IS IRREPLACEABLE IN OUR INDUSTRIALIZING WORLD AND STRATEGICALLY IMPORTANT TO MANY COUNTRIES. CHINA'S DOMINANCE WILL CONTINUE TO DRIVE OPPORTUNITY, THE PRICE IS FORECAST TO REMAIN STABLE AND ABOVE $400/MTU FOR THE NEXT FIVE YEARS. VLARGO CONCLUSION RESO URCES OPPORTUNITY SUMMARIZED TSX-V: LGO VISUAL CAPITALIST: EDUCATING A NEW www.visualcapitalist.com @VisualCap GENERATION OF INVESTORS ON RESOURCE INVESTING AND MANAGEMENT. VISUALCAPITALIST (gm/cm^