Largo Announces Termination and Waiver of March and June 2017 Capitalization Requirements, Respectively, BY Brazilian Banks
PRESS RELEASE July 12, 2017
LARGO ANNOUNCES TERMINATION AND WAIVER OF MARCH AND JUNE 2017
CAPITALIZATION REQUIREMENTS, RESPECTIVELY, BY BRAZILIAN BANKS
TORONTO – Largo Resources Ltd. (“ Largo” or the “ Company”) (TSX: LGO) (OTCQB: LGORF) is
pleased to announce that, further to its release of March 15, 2017, effective June 30, 2017 the
syndicate of Brazilian commercial lenders (the “Lenders”) under the Company’s existing debt facilities
have agreed to (i) terminate the US$5 million March 2017 capital injection requirement which has
been the subject of a temporary waiver since March 15, 2017 (See Company's press release of same
date), and (ii) postpone the additional US$5 mil lion June 2017 capitalization requirement until
December 31, 2017. The March 2017 and June 2017 capitalization requirements had initially been
required by the Lenders in connection with the entering into of the 2017 Facilities in January (see the
Company's press release of January 9, 2017). The Lenders have further agreed that if the Company
complies with the Payment Obligation (as defined below) then on December 31, 2017, the June 2017
capitalization requirement will also be terminated.
In consideration for the termination of the March 2017 capitalization requirement and the
postponement (and possible subsequent termination) of the June 2017 capitalization requirement, the
parties have agreed as follows:
Vanádio de Marac ás S.A. (the “ VMSA”), the Company's operating subsidiary, will pay, out of
cash flow from operations, an aggregate of approximately CDN$13 million in amounts owing to
the Lenders over the course of 2017, payment of which amounts had previously been
postponed (the “Payment Obligation”);
Disbursements by the Lenders under the 2017 Facilities will be reduced if the price of
vanadium pentoxide exceeds certain thresholds over a 12 week trailing period as follows:
o US$5.49/lb or less – no change to disbursement;
o between US$5.50/lb and US$5.99/lb – 10% reduction in disbursement;
o between US$6.00/lb and US$6.49/lb – 20% reduction in disbursement;
o between US$6.50/lb and US$6.99/lb – 40% reduction in disbursement;
o between US$7.00/lb and US$7.49/lb – 60% reduction in disbursement;
o between US$7.50/lb and US$7.99/lb – 80% reduction in disbursement; and
o US$8.00/lb or greater – no disbursement.
The previously semi-annual cash sweep payment obligation will now become assessable on a
quarterly basis.
Mark Smith, President and Chief Executive Officer for Largo, stated: " As a result of our continued
success with operations, our partners now agree that for so long as we meet the payment obligations,
additional cash injections into VMSA are no longer required. In addition, VMSA has now started to
pay down some of the obligations owin g to the Lenders. This is a great result for Largo and we look
forward to continuing to work with the Lenders to ensure the success of the Company."
About Largo
Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadi um
pentoxide at its Vanadio de Maracás Menchen Mine. Vanadium 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; includ ing, rebar, automobiles, transport
infrastructure etc. As trends in the steel industry now demand increasingly stronger and lighter
products for advanced applications, the use of vanadium is expected to grow over the medium and
long term. Largo also has interests in a portfolio of other projects, including: a 100% interest in the
Currais Novos Tungsten Tailings Project in Brazil; a 100% interest in the Campo Alegre de Lourdes
Iron-Vanadium Project in Brazil; and a 100% interest in the Northern Dancer Tungst en-Molybdenum
property in the Yukon Territory, Canada. For more information, please visit www.largoresources.com .
Disclaimer:
This press release contains forward -looking information under Canadian securities legislation.
Forward-looking information includes, but is not limited to, statements with respect to completion of
any financings; Largo's development potential and timetable of its operating, development and
exploration assets; Largo's ability to raise a dditional funds necessary; the future price of vanadium,
tungsten and molybdenum; the estimation of mineral reserves and mineral resources; conclusions of
economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated
future production, development and exploration; costs of future activities; capital and operating
expenditures; success of exploration activities; mining or processing issues; currency exchange rates;
government regulation of mining operations; and enviro nmental risks. Generally, forward -looking
statements can be identified by the use of forward -looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "d oes not anticipate", or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved". All information contained in this news release, other than statements of
current and historical fact, is forward looking information. Forward -looking statements are subject to
known and unknown risks, uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of the Largo to be materially different from those expressed or
implied by such forward -looking statements, including but not limited to those risks described in the
annual information form of Largo and in its public documents filed on SEDAR fr om time to time.
Forward-looking statements are based on the opinions and estimates of management as of the date
such statements are made. Although management of Largo has attempted to identify important factors
that could cause actual results to differ ma terially from those contained in forward-looking statements,
there may be other factors that cause results not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate, as actual results and futu re
events could differ materially from those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward -looking statements. Largo does not undertake to update any
forward-looking statements, except in accordance with ap plicable securities laws. Readers should
also review the risks and uncertainties sections of Largo's annual and interim MD&As.
NEITHER THE TORONTO STOCK EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
CONTACT INFORMATION:
For more information, please contact:
Largo Investor Relations