Symbol: LGO (TSX.V)
TORONTO, Aug. 7, 2014 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to announce that the Brazilian Development Bank ("BNDES") has approved an extension to the amortization period for the Company's debt facility (the "Facility").
The grace period for the payment of principal will be extended from the original date in August 2014 to April 2015, with the first principal payment to be made in May, 2015. The extension will be applicable to the majority of principal under the Facility, with the exclusion of R$43.4 million (or US$19.4 million) which does not qualify for extension.
The application of the financial covenants associated with the Facility will likewise be extended from December 2014 to December 2015 by the guarantor banks.
The terms of the agreement governing the Facility will remain the same with the exception that interest rates of the BNDES funding will increase by a weighted average of 0.23% per year. Once amortization has begun in May 2015, the Facility's amortization period (72 months) will continue over the same period as originally set forth, which means that the timeframe for payment will take place over 63 months from the date of first amortization.
Ernest Cleave, Chief Financial Officer for Largo, stated: "The extension of the Facility will reduce Largo's cash outflow by approximately US$2.1 million per month for the first 9 months of the Maracas Vanadium Project's operations, for a cumulative up-front saving of US$20 million during operational ramp up. This will provide a tremendous benefit to Largo as it will help ensure that we can ramp-up operations effectively and maintain the operating capital we require in the critical first months of the ramp up."
He continued: "We would like to take this opportunity to thank all of our banking partners for assisting us in completing this endeavor"
Largo (TSX-V: LGO) is a growing strategic mineral company with projects in Brazil and Canada. The immediate goal of the Company is to continue to steadily ramp-up production at its Maracás Vanadium Project.
Largo's Maracas Vanadium Project boasts the highest grade vanadium deposit yet discovered and is expected to be a low cost producer. With an off-take in place with commodities giant Glencore, Largo is well positioned to become a leading producer of vanadium globally and expects to generate substantial cash-flows.
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 a compound annual growth rate of over 6% for the past several years (Roskill, 2013), vanadium is a bourgeoning commodity, with concentrated supply 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.
Largo is listed on the TSX Venture Exchange under the symbol "LGO".
For more information please refer to Largo's website: www.largoresources.com
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This press release contains forward-looking information under Canadian securities legislation. forward-looking information includes, but is not limited to, statements with respect to completion of the private placement, Largo's development potential and timetable of the Maracás and Northern Dancer projects; Largo's ability to raise additional funds necessary; the future price of 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". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. 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. 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.
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SOURCE: Largo Resources Ltd.
For further information: Darcie Ladd, Manager Business Development, 416-861-9406, email@example.com; Mark Brennan, President & CEO