/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./
TORONTO, Oct. 6, 2014 /CNW/ - Arias Resource Capital Fund II L.P. ("ARCF II") and Arias Resource Capital Fund II (Mexico) L.P. ("ARCF Mexico") have completed the acquisition of a total of 53,571,429 units ("Units") of Largo Resources Ltd. ("Largo")(TSXV:LGO) pursuant to a non-brokered private placement (the "Offering"). The Units were acquired at a price of Cdn$0.28 per Unit for aggregate consideration of Cdn$15,000,000.00 to Largo.
In accordance with the terms of the Offering, each Unit consists of one common share in the capital of Largo (each a "Common Share") and one common share purchase warrant (each a "Warrant") of Largo. Each Warrant is exercisable for one Common Share at a price of Cdn$0.35, for a period of three years, expiring October 6, 2017.
ARCF II acquired a total of 50,695,129 Common Shares of Largo pursuant to the Offering and currently holds a total of 191,226,871 Common Shares, representing approximately 17.5% of the total outstanding Common Shares of Largo. Additionally, ARCF II holds 67,573,213 Warrants.
ARCF Mexico acquired a total of 2,876,300 Common Shares of Largo pursuant to the Offering and currently holds a total of 10,849,678 Common Shares, representing approximately 1.0% of the total outstanding Common Shares of Largo. Additionally, ARCF Mexico holds 3,833,915 Warrants.
Arias Resource Capital Fund L.P., ARCF II and ARCF Mexico (collectively, the "ARC Funds") currently hold an aggregate of 307,879,779 Common Shares and 89,241,338 Warrants. J. Alberto Arias, a director on the board of Largo and the sole director of each of the general partners of the ARC Funds, currently holds options to purchase 1,000,000 Common Shares of Largo ("Options") according to a vesting schedule at an exercise price of Cdn$0.28 per Common Share. Any securities acquired by Mr. Arias on the exercise of such Options would be held for the benefit of the ARC Funds on a pro rata basis according to their respective governing agreements. Accordingly, on an aggregate basis, assuming the exercise of the Options and Warrants currently held, the Common Shares held collectively by the ARC Funds would represent approximately 33.7% of the total outstanding Common Shares of Largo, on a partially-diluted basis.
The ARC Funds are a "Control Person" of Largo (as defined in the TSX Venture Exchange Corporate Finance Manual) by virtue of their current ownership and as a result of the Offering, the ARC Funds own up to 28.2% of Largo's issued and outstanding Common Shares (or approximately 33.7% of Largo's issued and outstanding Common Shares in the event that the ARC Funds exercise all of the convertible securities held by them).
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 Largo securities were acquired for investment 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: please contact: Alberto Arias, Director, phone: (212) 266-8600, e-mail: [email protected]