Symbol: LGO (TSX.V)
TORONTO, June 15, 2015 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to announce that it has received final approval from the Brazilian Development Bank "BNDES" and its consortium of commercial banks for the restructuring of its main construction debt facility (the "BNDES Facility") and its export credit facilities (the "Export Facilities", collectively with the BNDES Facility, the "Facilities") for its Maracas Menchen Mine (the "Plant" or "Project") in Bahia, Brazil.
Further to Largo's press release dated April 27, 2015, the material terms of the restructuring package include the following:
- An additional one-year grace period on the amortization schedule for the BNDES Facility;
- A two-year extension of the maturity date for the Export Facilities;
- A three-year extension of the maturity date for the US dollar component (as defined below) of the BNDES Facility with no change in the maturity of the R$ component (as defined below) of the BNDES Facility1;
- An increase in the guarantee fees payable to the commercial banks in respect of the BNDES Facility from 3.3% to 3.85% per annum; and
- Payment of a flat structuring fee in an amount equal to 1.5% of the aggregate amount of the Facilities.
Mark Smith, President and Chief Executive Officer, stated: "This is a major milestone for Largo and the Maracas Menchen Mine. The completed restructuring of our Facilities, coupled with the successful completion of our recent CDN$75.2 million equity financing, provides us with a strong financial foundation as we continue our ongoing ramp-up at the Plant, and we believe further de-risks the Company."
He continued: "We would like to sincerely thank our lenders for their continued support of Largo and the Maracas Menchen Mine. We believe that their willingness to engage in negotiations and conclude this restructuring is a strong indication of their belief in the Project's ability to achieve its intended design capacity within the timeframe set out by the Company, and also its ability to generate cash-flow."
He further went on to state: "The Company has now addressed its financial structure in response to a dramatic decline in the price of vanadium earlier this year – we strongly believe that this Project is already a success, and will continue to demonstrate this as we move forward towards reaching our target capacity."
Largo (TSX-V: LGO) is a growing strategic mineral company focused on continuing to ramp-up production at its Vanadio de Maracás Menchen Mine.
Largo's Maracás Menchen Mine boasts the highest grade vanadium deposit yet discovered and is expected to be a low cost producer. With an off-take in place with Glencore, Largo is well positioned to become a leading producer of vanadium globally and is expected 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 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 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 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 TSX VENTURE EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
1 As stated in a press release on April 27, 2015, there will be no change in the maturity of the R$ component of the BNDES Loan, while the maturity of the U.S. dollar component is extended. The BNDES Loan is denominated in Brazilian reais (R$) and measured as at March 31, 2015, approximately 67% of the total facility of R$461.2 million was indexed to the U.S. dollar ("U.S. dollar component"). The remaining 33% is not indexed ("R$ component").
SOURCE Largo Resources Ltd.
For further information: Darcie Ladd, Vice President, Investor Relations, 416-861-9406, [email protected]