Largo Resources Announces Closing of Second and Final Tranche of Private Placement FOR Aggregate Proceeds of $35.5 Million
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This release is intended for distribution in Canada only and is not intended for distribution to United
States newswire services or for dissemination in the United States.
LARGO RESOURCES ANNOUNCES CLOSING OF SECOND AND FINAL TRANCHE OF
PRIVATE PLACEMENT FOR AGGREGATE PROCEEDS OF $35.5 MILLION
December 13, 2017 – Toronto, Ontario – Largo Resources Ltd. (TSX - LGO) (the “Corporation”) is
pleased to announce the closing of the second tranche (“Second Tranche”) of its previously announced
non-brokered private placement of Units (as defined below) at a price of $0.82 per Unit (the “Offering
Price”), for aggregate gross proceeds of approximately $35.5 million (the “Offering”). In order to
accommodate demand, Largo has also increased the size of the Offering by an additional $500,000
since its press release of December 7, 2017 announcing the initial increase from $25M to $35M.
The Corporation raised gross proceeds of $21,416,544.30 in the Second Tranche through the issuance
of 26,117,737 Units and also settled long-term debt of $5,991,686.51 (the “ Debt Settlement”) through
the issuance of an additional 7,306,934 Units to an arm's length lender (see below), for an aggregate
issuance under this Second Tranche of 33,424,671 U nits. Combined with the gross proceeds raised in
the First Tranche of $8,091,769.84 through the issuance of 9,868,012 Units and including the Debt
Settlement, the Offering has resulted in effective proceeds to the Corporation of approximately $35.5
million. No finders’ fees were paid and no finders’ warrants were issued in connection with the Offering.
The Corporation intends to use the proceeds for working capital.
Each Unit consists of one common share in the capital of the Corporation and one half of one common
share purchase warrant, with each whole warrant exercisable into one common share at a price of $1.15
for five years from the closing (each a “Unit”).
As contemplated by the press release dated December 1, 2017 issued in connection with the closing of
the First Tranche, the Corporation entered into an agreement with Banco Pine S.A. ( “Pine”) to effect
the Debt Settlement resulting in the conversion of all of the debt outstanding to Pine in Canada, being
$5,991,687.51 (the “Debt”). As set out above, Pine will receive 7,306,934 Units in full and final
satisfaction of the Debt as part of the Second Tranche closing.
Mark Smith, President and Chief Executive Officer for Largo, stated: “The tremendous results of this
non-brokered financing give us the working capital we need at corporate to focus our resources and
time on operations and debt restructuring in Brazil. The Debt Settlement represents the first step in our
efforts to improve our capital structure and drive be tter results for Largo moving forward. We believe
that 2018 will be a strong year for vanadium and with closing of our Offering, we are now in an ideal
position to benefit from this.”
Arias Resource Capital Fund II L.P. ( “ARCF II ”) and Arias Resource Capital Fund II (Mexico) L.P.
(“ARCF Mexico ”) purchased an aggregate of 9,844,857 Units in the Second Tranche for gross
proceeds to the Corporation of $8,072,782.74. Prior to the closing of the Second Tranche ARCF II and
ARCF Mexico, together with Arias Resource Capital Fund L.P. (collectively the “ARC Funds”) owned
57.3% of the Corporations then issued and outstanding Common Shares and following closing of the
Second Tranche, the ARC Funds will own 55.5% (or 62.1% in the event that the ARC Funds and its
affiliates exercised all of the convertible securities held by them) of the Corporation ’s issued and
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outstanding Common Shares. The shareholders of the Corporation approved the creation of the ARC
Funds as a control person of the Corporation at the annual and special meeting of the shareholders of
the Corporation held on June 27, 2013.
The sale of Units to ARCF II and ARCF Mexico constitutes a “related party transaction ” as defined
under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions
(“MI 61-101”). The Corporation is exempt from the formal valuation and minority shareholder approval
requirements of MI 61-101, as neither the fair market value of securities being issued to insiders nor the
consideration being paid by insiders exceeded 25% of the Corporation’s market capitalization. None of
the Corporation ’s directors expressed any contrary view s or disagreements with respect to the
foregoing. The Corporation did not file a material change report 21 days prior to the closing of the
Offering as the details of the participation of the insiders of the Corporation had not been confirmed at
that time.
The securities issued in the Offering are subject to a hold period.
About Largo Resources Ltd.
Largo Resources Ltd. is a strategic mineral company focused on the production of vanadium pentoxide
at its Vanadio de Marac ás 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; including, rebar, automobiles, transport infrastructure etc. As
trends in the steel industry now demand increas ingly stronger and lighter products for advanced
applications, the use of vanadium is expected to gr ow 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 t he Campo Alegre de Lourdes Iron-Vanadium Project in
Brazil; and a 100% interest in the Northern Dancer Tungsten-Molybdenum property in the Yukon
Territory, Canada. For more information, please visit www.largoresources.com.
Forward-Looking Statements
This news release contains “forward-looking information ” within the meaning of applicable Canadian
securities laws, including statements regarding the anticipated use of proceeds. Forward-looking
information is not a guarantee of future performance or results, since it involves risks and uncertainties.
There is no assurance that forward-looking statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in forward-looking statements. Some of the
factors on which the forward-looking statements are premised include (but are not limited to) the lack of
material changes to general economic, market and business conditions. Forward-looking information is
subject to the risk that those factors will not materialize, and to other risks, including the price of
vanadium in 2018. Except as required by law, the Corporation does not assume and expressly
renounces any obligation to update any forward-looking information, which is only applicable on the date
on which it is given.
For further information, please contact:
Largo Investor Relations