That's a safety, commonly called the 'thumb safety' for it's means of operation. Same as on a Colt 1911/.
It can only be engaged into the 'safe' mode (UP position) with the hammer at full cock.
The other lever is the slide stop/lock that diamonback68 refers to. Again,,same set up as the Colt. I think you're refering to the thumb safety here,,and not the slide lock in your question.
Both the Llama and Star Spanish pistols have an often seen problem with the thumb safety in that when trying to engage it (push UP with the hammer at full cock), the hammer also needs to be slightly pulled back to allow it to engage. This makes the operation a two handed affair.
It should be able to be engaged with out that extra step and in doing so you'll see the hammer ever so slightly cammed back off of the sear by it's action.
Don't recall that they made the small frame Llama's in stainless, perhaps they did. It's most likely a chrome plate finish if it is factory engraved. Faux pearl grips were normally supplied on the plated and engraved Llama pistols.
Neat little guns. I've had several in 22LR and recently one in 32acp. Early ones are marked 'Especial' on the side of the slide for the model designation. Later went to a Roman Numeral model designation.