Largo Announces Closing of the First Tranche of Its Current Private Placement Offering FOR Aggregate Gross Proceeds of CDN$15.09M
PRESS RELEASE January 9, 2017
LARGO ANNOUNCES CLOSING OF THE FIRST TRANCHE OF ITS CURRENT PRIVATE
PLACEMENT OFFERING FOR AGGREGATE GROSS PROCEEDS OF CDN$15.09M
TORONTO – Largo Resources Ltd. (" Largo " or the " Company ") ( TSX: LGO ) ( OTCQB: LGORF ) is
pleased to announce today that it has closed the fi rst tranche (the " First Tranche ") of its non-brokered
private placement offering (the " Offering ") of Units (as defined below) as previously disclo sed in Largo’s
press release dated December 28, 2016.
The closing of the First Tranche resulted in gross proceeds to the Company of CDN$15,085,803.15 from
the sale of 33,524,007 units of the Company (the “ Units ”). The proceeds realized from the First Tranche
will be used for ongoing working capital requiremen ts at the Company’s Maracás Menchen Mine (see
below), and for general corporate and working capital purposes.
Each Unit was sold at a price of CDN$0.45 and consi sts of one common share of the Company (each, a
"Common Share ") and one common share purchase warrant (each whol e warrant, a " Warrant "). Each
Warrant issued in the First Tranche will be exercis able into one Common Share at a price of CDN$0.65
per share for a period of three years from closing of the First Tranche. All securities issued in the Offering
will be subject to a four-month hold from the date of issuance.
As set out in the Company's press release of Novemb er 16, 2016, the syndicate of Brazilian commercial
lenders (the " Lenders ") under the Company’s existing debt facilities req uired an injection of working
capital (the “ Working Capital Injection Condition ”) into the Company’s operating subsidiary of not l ess
than US$15 million prior to December 31, 2016 as a condition of granting a new debt facility to the
Company (the " 2017 Facilities ") which would have the effect of pushing back prin cipal and interest
payments on the Company’s existing debt facilities for an additional calendar year. Absent the 2017
Facilities, the Company would be required to begin making principal and interest payments effective
January 15, 2017. Subsequently, as disclosed in the Company’s press release of December 28, 2016,
the Lenders agreed to extend the December 31, 2016 date to January 10, 2017.
The Lenders subsequently agreed to amend the paymen t terms of the Working Capital Injection
Condition to provide for an injection into the Comp any’s operating subsidiary of not less than US$10
million prior to January 10, 2017, with the remaini ng US$5 million being required by March 15, 2017. O f
the gross proceeds from the First Tranche, US$10 million will be used to satisfy the initial payment under
the Working Capital Injection Condition.
Funds managed by Arias Resource Capital Management LP (the " ARC Funds ") purchased an
aggregate of 14,395,675 Units in the First Tranche for gross proceeds to the Company of
CDN$6,478,053.75. Prior to the closing of the First Tranche the ARC Funds owned 59.86% of the
Company's then issued and outstanding Common Shares and following closing of the First Tranche, the
ARC Funds will own 58.62% (or 66.04% in the event that the ARC Funds and its affiliates exercised all of
the convertible securities held by them) of the Com pany’s issued and outstanding Common Shares. The
shareholders of the Company approved the creation o f the ARC Funds as a control person of the
Company at the annual and special meeting of the shareholders of the Company held on June 27, 2013.
An entity managed by Mr. Alberto Beeck, a director of Largo, subscribed for an aggregate of 10,450,000
Units under the First Tranche for gross proceeds to the Company of CDN$4,702,500. Prior to the closing
of the First Tranche the entities managed or advise d by Mr. Beeck owned 8.74% of the Company's then
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issued and outstanding Common Shares and following closing of the First Tranche, these entities will
own 10.38% (or 14.72% in the event that Mr. Beeck a nd these entities exercised all of the convertible
securities held by them) of the Company’s issued and outstanding Common Shares.
The sale of Units to any of the ARC Funds and the e ntity managed by Mr. Beeck under the Offering is a
“related party transaction” as defined in Multilate ral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions (" MI 61-101 "). The Company is exempt from the requirements to obtain
a formal valuation or minority shareholder approval in connection with the Offering in reliance on sections
5.5(a) and 5.7(a), respectively, of MI 61-101, as t he fair market value of the Units issued to the ARC
Funds or the entity managed by Mr. Beeck does not e xceed 25% of the Company’s market capitalization
calculated in accordance with MI 61-101. The materi al change report is being filed less than 21 days
before the closing of the Offering as the Company r equires the consideration it will receive in connec tion
with the Offering immediately for working capital purposes.
About Largo
Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium
pentoxide at its Vanadio de Maracás Menchen Mine. V anadium is primarily used as an alloy to
strengthen steel and reduce its weight. Vanadium enhanced steels are used in a vast and growing range
of products that are used and encountered every day ; including, rebar, automobiles, transport
infrastructure etc. As trends in the steel industry now demand increasingly stronger and lighter produ cts
for advanced applications, the use of vanadium is e xpected to grow over the medium and long term.
Largo also has interests in a portfolio of other pr ojects, including: a 100% interest in the Currais N ovos
Tungsten Tailings Project in Brazil; a 100% interes t in the Campo Alegre de Lourdes Iron-Vanadium
Project in Brazil; and a 100% interest in the North ern Dancer Tungsten-Molybdenum property in the
Yukon Territory, Canada. For more information, please visit www.largoresources.com .
Disclaimer:
This press release contains forward-looking informa tion under Canadian securities legislation. Forward -looking
information includes, but is not limited to, statem ents with respect to completion of any financings; Largo's
development potential and timetable of its operatin g, development and exploration assets; Largo's abil ity to raise
additional funds necessary; the future price of van adium, tungsten and molybdenum; the estimation of m ineral
reserves and mineral resources; conclusions of econ omic evaluation; the realization of mineral reserve estimates;
the timing and amount of estimated future productio n, development and exploration; costs of future act ivities;
capital and operating expenditures; success of expl oration activities; mining or processing issues; cu rrency
exchange rates; government regulation of mining ope rations; and environmental risks. Generally, forwar d-looking
statements can be identified by the use of forward- looking terminology such as "plans", "expects" or " does not
expect", "is expected", "budget", "scheduled", "est imates", "forecasts", "intends", "anticipates" or " does not
anticipate", or "believes", or variations of such w ords and phrases or statements that certain actions , events or
results "may", "could", "would", "might" or "will b e taken", "occur" or "be achieved". All information contained in this
news release, other than statements of current and historical fact, is forward looking information. Fo rward-looking
statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievem ents of the Largo to be materially different from t hose expressed
or implied by such forward-looking statements, incl uding but not limited to those risks described in t he annual
information form of Largo and in its public documents filed on SEDAR from time to time.
Forward-looking statements are based on the opinion s and estimates of management as of the date such
statements are made. Although management of Largo h as attempted to identify important factors that cou ld cause
actual results to differ materially from those cont ained in forward-looking statements, there may be o ther factors
that cause results not to be as anticipated, estima ted or intended. There can be no assurance that suc h statements
will prove to be accurate, as actual results and fu ture events could differ materially from those anti cipated in such
statements. Accordingly, readers should not place u ndue reliance on forward-looking statements. Largo does not
undertake to update any forward-looking statements, except in accordance with applicable securities la ws. Readers
should also review the risks and uncertainties sections of Largo's annual and interim MD&As.
NEITHER THE TORONTO STOCK EXCHANGE (NOR ITS REGULAT ORY SERVICE PROVIDER) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
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CONTACT INFORMATION:
For more information, please contact:
Largo Investor Relations