ARC Funds Percentage Interest in Largo Decreases

/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, Jan. 9, 2017 /CNW/ - Arias Resource Capital Fund II L.P. ("ARCF II") and Arias Resource Capital Fund II (Mexico) L.P. ("ARCF II Mexico") announced today that they, collectively, acquired an additional 14,395,675 units of Largo Resources Ltd.  ("Largo") at a price of Cdn$0.45 per unit for an aggregate subscription price of Cdn.$6,478,053.75 in connection with Largo's previously announced non-brokered private placement of approximately 33,524,007 units (the "January Offering").  Each unit consists of one common share in the capital of Largo ("Common Shares") and one Common Share purchase warrant entitling the holder to acquire one Common Share at a price of Cdn$0.65 per Common Share for a period of three years from the closing date (each whole warrant, a "Warrant"). 

On September 7, 2016, Largo announced that it issued 7,465,555 units pursuant to a non-brokered private placement (the "September 7 Offering"), each unit consisting of one Common Share and one-half of one Warrant. ARCF II and ARCF II Mexico collectively acquired 5,800,000 units of Largo in the September 7 Offering at a price of Cdn.$0.45 per unit for an aggregate subscription price of Cdn.$2,610,000.

On September 12, 2016, Largo announced that it issued 2,428,442 units pursuant to a non-brokered private placement (the "September 12 Offering"), each unit consisting of one Common Share and one-half of one Warrant. ARCF II and ARCF II Mexico did not participate in the September 12 Offering.

In September 2016, Largo granted options to the members of its Board of Directors, which included the grant of fully vested options to purchase 200,000 Common Shares (the "Options") to J. Alberto Arias

On October 4, 2016, Largo announced that it issued 1,217,114 units on a non-brokered private placement basis (the "October Offering" and, together with the January Offering, the September 7 Offering and the September 12 Offering, the "Offerings"), each unit consisting of one Common Share and one-half of one Warrant. ARCF II and ARCF II Mexico collectively acquired 428,232 units in the October Offering at a price of Cdn.$0.45 per unit for an aggregate subscription price of Cdn.$192,704.40.

Following the January Offering, ARCF II, ARCF II Mexico and Arias Resource Capital Fund L.P. (collectively, the "ARC Funds") own, in the aggregate, 268,057,865 Common Shares and 99,533,674 Warrants. J. Alberto Arias has been granted for service on the Largo Board of Directors a total of 398,000 Options, 373,000 of which are vested. Giving effect to the acquisition of units under the Offerings and assuming the exercise in full of the Warrants by the ARC Funds and the vested Options by J. Alberto Arias, the Common Shares held by the ARC Funds and J. Alberto Arias, collectively, would represent approximately 66.04% of the total outstanding Common Shares of Largo, on a partially-diluted basis.

As at March 3, 2016, the date of the ARC Funds' most recently filed report under National Instrument 62-103 -  The Early Warning Systems and Related Take-Over Bid and Insider Reporting Issues in respect of their ownership of Common Shares, the ARC Funds and J. Alberto Arias collectively owned approximately 68.68% of the issued and outstanding Common Shares on a partially diluted basis. Giving effect to the Offerings and the grant of the Options to J. Alberto Arias, the ARC Funds and J. Alberto Arias' collective proportionate ownership over Common Shares, on a partially-diluted basis, decreased by approximately 2.64%, as summarized below:



Common Shares issuable on
exercise or conversion





Common
Shares
Owned

Warrant
Shares

Option
Shares

Partially
Diluted Total

% Ownership
of Partially
Diluted Shares

% Change in
Ownership
since March
3, 2016

J. Alberto Arias

---

---

373,000

373,000

0.07%

0.04%

Arias Resource Capital Fund L.P.

51,867,191

13,156,707

---

65,023,898

11.67%

(2.08%)

ARCF II

204,583,201

81,739,310

---

286,322,511

51.39%

(0.57%)

ARCF II (Mexico)

11,607,473

4,637,657

---

16,245,130

2.92%

(0.03%)

TOTAL:

268,057,865

99,533,674

373,000

367,964,539

66.04%

(2.64%)

 

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, J. Alberto 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 Common Shares and Warrants were acquired by the ARC Funds for investments purposes.  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 II L.P.

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

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Arias Resource Capital Fund II L.P.

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Arias Resource Capital Fund II (Mexico) L.P.

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