Symbol: LGO (TSX.V)
TORONTO, Nov. 29, 2013 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to provide an updated budget estimate ("Budget" or "CAPEX") for mechanical completion of its Maracas Vanadium Project (the "Project") in Bahia, Brazil.
The current budget forecast for mechanical completion of the project is USD $248 million, which includes the full utilization of a USD $7 million contingency provision that is currently unallocated, versus an initial budget of USD $230 million (see press release September 13, 2012).
This forecasted variance of USD $18 million is offset by USD $30 million in additional funding available from the following:
- USD $17 million equity currently expected to close in mid-December 2013 as set out in a press release dated November 29, 2013.
- USD $13 million in additional funding under the Project's lending facilities due to depreciation of the Brazilian Real.
As such, the Company expects that it will have sufficient funds to complete the Project's remaining CAPEX.
The appreciation in the Maracas Project's budget (+7.8%) is primarily the consequence of delays to the Project's initial completion date resulting from manufacturing issues and the subsequent delay in delivery by a supplier of 4 rollers for the kiln and cooler (see press release August 21, 2013). Some of the costs associated with this delay include: additional work hours and incidentals for electro-mechanical contractors and the postponement of anticipated revenue.
Mark Brennan, President and Chief Executive Officer for Largo, stated: "I am extremely pleased with progress at the Maracas Project to date. Although we are disappointed that the delay in the delivery of the kiln cooler rollers has caused a slight increase to our projected budget, I must commend my team for their diligence in maintaining such a close track to the budget despite these circumstances." He added, "It is quite uncommon for projects of this size and scale to be so close to the initial projected budget at this advanced stage of development. We are confident that we will complete construction in Q1, and expect that we will also will continue to track very close to this revised budget for which we are sufficiently funded."
Largo is a growing strategic mineral company with projects in Brazil and Canada. The immediate goal of the Company is to complete the development of its Maracás Vanadium Project which is expected in the first quarter of 2014. Largo also has interests in a portfolio of other projects, including: a 100% interest in the Currais Novos Tungsten Tailings Project in Brazil, which the Company continues to develop; 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.
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