Arias Resource Capital Fund L.P. increases position in Largo Resources Ltd. pursuant to an exercise of warrants

/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, Sept. 16, 2011 /CNW/ - Arias Resource Capital Fund L.P. ("ARCF I"), announced that it acquired 10,294,118 common shares of Largo Resources Ltd. (TSXV: LGO) (the "Company") upon exercise of common share purchase warrants of the Company that ARCF I acquired pursuant to a private placement transaction that closed on September 16, 2010 (the "2010 Warrants"). ARCF I exercised 10,294,118 warrants at an exercise price of C$0.25 per share for an aggregate price of C$2,573,529.50.

Following the exercise of the 2010 Warrants, ARCF I currently holds 63,485,432 common shares of the Company representing approximately 15.1% of the total outstanding common shares of the Company.

Additionally, ARCF I also owns (i) 31,672,311 subscription receipts of the Company ("Subscription Receipts"), with each Subscription Receipt being convertible, at no additional cost, for one unit of the Company upon satisfaction of certain escrow release conditions, each such unit being comprised of one common share of the Company and one-third of one common share purchase warrant (each whole warrant, a "Warrant") and (ii) 3,728,277 Warrants exercisable for an additional 3,728,277 common shares of the Company at an exercise price of C$0.50 expiring on April 7, 2015.  Assuming the exercise of the 3,728,277 Warrants, ARCF I currently holds 15.8% of the total outstanding common shares of the Company, on a partially-diluted basis.

Arias Resource Capital Fund II L.P. ("ARCF II") holds 4,600,628 common shares of the Company representing approximately 1.1% of the total outstanding common shares of the Company, 13,027,689 Subscription Receipts and 1,533,543 Warrants.  Assuming the exercise of the 1,533,543 Warrants, ARCF II currently holds 1.5% of the total outstanding common shares of the Company, on a partially-diluted basis.

Assuming the exercise of the Warrants currently held by ARCF I and ARCF II (collectively, the "ARC Funds"), combined the ARC Funds currently hold 17.2% of the total outstanding common shares of the Company, on a partially-diluted basis.

The ARC Funds have agreed not to exercise any of the Subscription Receipts where such exercise could result in the ARC Funds, together with any affiliate, becoming a new "control person" (as defined in the TSX Venture Exchanges policies) until such time as the regulatory and shareholder approvals necessary to permit such exercise are obtained.

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 with respect to the securities of the Company 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 securities of the Company 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 exercise of the 2010 Warrants was executed for investment purposes. ARCF I may, from time to time, acquire additional securities of the Company or decrease its ownership of securities of the Company as it 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:

Alberto Arias, Director, phone: (212) 266-8600, email: info@arc-fund.com.


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