ARC Funds Increase Position in Largo

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TORONTO, May 22, 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 today that they, collectively, acquired an additional 48,000,000 Units at a price of $0.80 per Unit for an aggregate subscription price of Cdn$38,400,000 pursuant to the second tranche of Largo's previously announced private placement of Units (the "Offering").  Each Unit consists of one common share in the capital of Largo ("Common Shares") and one half of one Common Share purchase warrant.  Each whole warrant entitles the holder to acquire one further Common Share at a price of Cdn$1.50 per Common Share for a period of one year from the date of issuance.

Prior to the closing of the second tranche of the Offering, the ARC Funds owned an aggregate of 46,100,473 Common Shares and 14,063,389 Common Share purchase warrants ("Warrants").  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.  Giving effect the acquisition of Units under the second tranche of the Offering and assuming the exercise in full of the Warrants 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 55.06% of the total outstanding Common Shares of Largo, on a partially-diluted basis, as summarized below:

		Common Shares issuable on exercise or conversion
	Common  Shares Owned	Warrant Shares	Option  Shares	Partially  Diluted Total	% Ownership  of Common  Shares		% Change in Ownership
J. Alberto Arias	---	---	25,000	25,000	0.01%		(0.01)%
ARCF I	25,553,777	7,486,727	---	33,040,504	13.76%		1.12%
ARCF II	64,866,362	28,934,974	---	93,801,336	39.07%		12.07%
ARCF II (Mexico)	3,680,334	1,641,688	---	5,322,022	2.22%		0.68%
TOTAL:	94,100,473	38,063,389	25,000	132,188,862	55.06%		13.87%

Participation by the ARC Funds in the second tranche was conditional upon several conditions, including the execution and delivery of a director nomination agreement permitting the ARC Funds to designate (a) two additional persons to be nominated for election to Largo's board of directors for election by Largo shareholders, including at the next annual meeting of Largo shareholders, for so long as the ARC Funds, whether individually or together, own at least 40% of the issued and outstanding Common Shares and (b) to designate one additional person to be nominated for election to Largo's board of directors for election by Largo shareholders, for so long as the ARC Funds, whether individually or together, own less than 40% but not less than 20% of the issued and outstanding Common Shares.  These nomination rights are in addition to the ARC Funds' existing right to nominate one director to Largo's board of directors under the existing governance agreement and, accordingly, the ARC Funds will designate three directors for election at the next annual meeting of shareholders.

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 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: Alberto Arias, Director, phone: [phone], e-mail: [e-mail].