ARC Funds Advance Additional CDN$2 Million under Largo Bridge Loan

/THE DISSEMINATION OF THIS RELEASE IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICE MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS./

/FOR DISSEMINATION IN CANADA AND OVER CANADIAN NEWS SERVICES ONLY/

TORONTO, April 10, 2015 /CNW/ - Arias Resource Capital Fund L.P. ("ARCF I"), Arias Resource Capital Fund II L.P. ("ARCF II") and Arias Resource Capital Fund II (Mexico) L.P. ("ARCF II Mexico", together with ARCF I and ARCF II, the "ARC Funds") announced that they have advanced an additional Cdn$2 million (the "Third Advance") under the previously announced Cdn$12 million non-revolving, convertible term loan facility (the "Bridge Loan") with Largo Resources Ltd. ("Largo")(TSXV:LGO).  The aggregate amount advanced by the ARC Funds under the Bridge Loan, including the Third Advance, is Cdn$8 million.

As previously announced, the Bridge Loan has a 6-month term and is expected to be drawn down by Largo on a bi-weekly basis over approximately 8 weeks, commencing on March 13, 2015. The Bridge Loan is convertible at the option of the ARC Funds, in whole or in part, into common shares of Largo ("Common Shares") at a conversion price of Cdn$1.01 per Common Share.

The ARC Funds currently own an aggregate of 30,787,975 Common Shares and 6,407,141 Common Share purchase warrants ("Warrants").  An aggregate of 2,516,983 Warrants recently expired.  J. Alberto Arias, the sole director of each of the general partners of the ARC Funds and a director on the board of Largo, currently holds options to purchase 100,000 Common Shares of Largo ("Options"), 25,000 of which are vested.  Accordingly, assuming of the exercise in full of the Warrants, the conversion in full of the Cdn$8 million Bridge Loan advances and the exercise in full of the vested Options, the Common Shares held by J. Alberto Arias and the ARC Funds, collectively, would represent approximately 36.52% of the total outstanding Common Shares of Largo, on a partially-diluted basis, as summarized below:

 



Number of Common Shares that could be
acquired upon exercise or conversion



Common
Shares Owned

Warrant
Shares

Bridge Loan
Shares (Cdn
$8M
Advanced)

Option Shares


TOTAL

J. Alberto Arias

---

---

---

25,000

25,000

ARCF I

10,580,323

---

2,721,987

---

13,302,310

ARCF II

19,122,685

6,063,136

4,919,672

---

30,105,493

ARCF II (Mexico)

1,084,967

344,005

279,128

---

1,708,100

TOTAL:

30,787,975

6,407,141

7,920,787

25,000

45,140,903

 

Pursuant to the Bridge Loan documents, the ARC Funds have been granted a participation option to subscribe for up to an aggregate of Cdn$40 million of securities under any proposed offering of Common Shares or securities exchangeable or convertible into Common Shares on or after the date of the Bridge Loan agreement (the "Participation Right") as described in the ARC Funds' press release dated March 16, 2015. 

The ARC Funds are managed by Arias Resource Capital Management LP (the "Manager").  The respective general partner of each of the ARC Funds retains the power to make investment and voting decisions in respect of the Largo securities beneficially owned by the ARC Funds.  J. Alberto Arias is the sole director of each of the general partners of the ARC Funds and indirectly controls the Manager.  As such, Mr. Arias may be deemed to share voting and dispositive power with respect to the Largo securities beneficially owned by the ARC Funds, but he disclaims any beneficial ownership of any such securities, except to the extent of his pecuniary interest therein.  The value of any securities acquired by Mr. Arias on the exercise of such Options would be held for the benefit of the ARC Funds on a pro rata basis according to their respective governing agreements.

The ARC Funds may, from time to time, subject to all necessary regulatory approvals, acquire additional securities of Largo and/or dispose of such securities as they may deem appropriate.

This news release has been disseminated in accordance with the early warning requirements of Canadian provincial securities laws.

 

SOURCE ARIAS RESOURCE CAPITAL FUND L.P.

For further information: please contact: Alberto Arias, Director, phone: (212) 266-8600, e-mail: info@arc-fund.com.


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