Yes, you will still lose weight. Here is an article from ACE that you might find helpful:
Q: Will I lose body fat more efficiently by performing my aerobic workouts at a low, rather than a high, intensity?
A: Many aerobic exercise programs and videos feature low-intensity workouts which purport to maximize fat burning. The argument behind such an alleged theory is that low-intensity aerobic training will allow your body to use more fat as an energy source, thereby accelerating the loss of body fat.
While it is true that a higher proportion of calories burned during low-intensity exercise come from fat (about 60 percent as opposed to approximately 35 percent from high-intensity programs), high-intensity exercise still burns more calories from fat in the final analysis.
For example, if you perform 30 minutes of low-intensity aerobic exercise (i.e., at a level of 50 percent of maximal exercise capacity), you'll burn approximately 200 calories - about 120 of those come from fat (i.e., 60 percent).
However, exercising for the same amount of time at a high intensity (i.e., 75 percent of your maximal exercise capacity) will burn approximately 400 calories. Using a 35 percent fat utilization yardstick, 140 of the calories you've burned will have come from stored fat.
Although the more vigorous exercise burns both more total and more fat calories, the less intense form of exercise has its benefits as well. For example, because many overweight people tend to find that lower-intensity exercise is more comfortable, they may, therefore, be willing to engage in such workouts.
The point to remember is that low-intensity workouts do, in fact, promote weight and fat loss. You just have to do them for a longer period of time.
Low-intensity aerobic exercise, however, is not a better or more effective way to lose weight than more intense physical activity - the idea of a "fat-burning zone" is simply a myth.
Keep in mind that you lose weight and body fat when you expend more calories than you consume, not because you burn fat (or anything else) when you exercise.
Source: Bryant, Cedric X. 101 Frequently Asked Questions about "Health & Fitness" and "Nutrition & Weight Control". Sagamore Publishing, 1999.
We're fat chicks, not doctors. Please see your physician before taking advice found on the internet.