TORONTO, Sept. 12, 2016 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQB: LGORF) is pleased to announce today that it has closed a second tranche (the "Second Tranche") of its up to $5 Million non-brokered private placement offering (the "Offering") of Units (as defined below).
The closing of the Second Tranche resulted in gross proceeds to the Company of CDN$1,092,800 from the sale of 2,428,442 units of the Company (the "Units"), which, together with the first tranche of the Offering (see the Company's news release of September 7, 2016), has resulted in aggregate gross proceeds to the Company to date of approximately CDN$4.45 million from the sale of an aggregate of 9,893,997 Units. The proceeds realized from the Second Tranche will be used for ongoing working capital requirements at the Company's Maracás Menchen Mine, and for general corporate and working capital purposes.
Each Unit was sold at a price of CDN$0.45 and consists of one common share of the Company (each, a "Common Shares"), and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant issued in the Second Tranche will be exercisable into one Common Share at a price of CDN$0.65 per share for a period of three years from closing of the Second Tranche. All securities issued in the Offering will be subject to a four-month hold from the date of issuance.
An entity controlled by Mr. Alberto Beeck, a director of Largo, subscribed for an aggregate of 555,555 Units under the Second Tranche of the Offering. Pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the purchase by the entity controlled Mr. Beeck of the Units under the Offering is a "related party transaction". The Company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Offering in reliance of sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as the fair market value of the Units being sold under the Offering to this entity does not exceed 25% of the Corporation's market capitalization. The material change report is being filed less than 21 days before the closing of the Offering as the Company requires the consideration it will receive in connection with the Offering immediately for working capital purposes.
Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium 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; including, rebar, automobiles, transport infrastructure etc. With consumption increasing at a compound annual growth rate of over 8% for the past several years (Roskill, 2015), vanadium is a bourgeoning commodity which lacks opportunities for investment in the wider market place. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to continue this growth 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 Tungsten-Molybdenum property in the Yukon Territory, Canada. For more information, please visit www.largoresources.com.
This press release contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, negotiation of the Definitive Agreement and completion of the transactions contemplated in the MOU, 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 additional 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 environmental 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 "does 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 from 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 materially 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 future 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 applicable 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.
SOURCE Largo Resources Ltd.
For further information: Alex Guthrie, Coordinator, Corporate Communications, 416.861.9797, email@example.com