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TORONTO, March 4, 2013 /CNW/ - Largo Resources Ltd. (TSX-V: LGO) ("Largo" or the "Company") announced today a C$7 million non-brokered private placement of common shares (the "Offering") at a price of C$0.23 per common share resulting in the issuance of up to 30,434,783 common shares. Proceeds from the offering will be used for general corporate purposes.
The Company anticipates that approximately C$1,393,000 of the Offering, or up to 6,056,522 common shares, will be purchased by funds managed by Arias Resource Capital Management LP (the "ARC Funds") and approximately C$607,000 of the Offering, or an aggregate of 2,639,130 common shares, will be purchased by Mackenzie Investments ("Mackenzie"). Largo anticipates that the remaining C$5 million of the Offering will be purchased by existing shareholders of the Company.
The ARC Funds and Mackenzie are insiders of the Company by virtue of their current ownership of approximately 19.98% and 15.86%, respectively, of the Company's common shares. Assuming the Offering is fully sold, it is expected that after completion of the Offering, the ARC Funds will own up to 19.98% of the Company's then issued and outstanding common shares and Mackenzie will own 15.62% of the Company's then issued and outstanding common shares.
The Offering is expected to close on or about March 8, 2013 and is subject to certain customary closing conditions, including but not limited to receipt of all required regulatory approvals, including the approval of the TSX Venture Exchange. All common shares of the Company issued in connection with the Offering will be subject to a hold period in Canada of four months and one day from the date of issuance. The net proceeds of the Offering will be used for general working capital purposes.
The Offering was considered and approved by the board of directors of the Company. J. Alberto Arias, a director of Largo who is also the sole director of each of the general partners of the ARC Funds and indirectly controls Arias Resource Capital Management LP, declared a conflict and recused himself from voting on the Offering. There was no materially contrary view or abstention by any director approving the Offering.
Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the proposed purchase by the ARC Funds and Mackenzie will be a "related party transaction". The Company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Offering in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as neither the fair market value of the securities received by the ARC Funds and Mackenzie nor the proceeds for such securities received by the Company exceeds 25% of the Company's market capitalization as calculated in accordance with MI 61-101.
Largo is a Canadian-based mineral resource exploration and development company focused on creating a world leading strategic metals company. Largo currently holds a 100% interest in the Maracás Vanadium Project, a 100% interest in the Currais Novos Tungsten Tailings Project, a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project, all in Brazil, and a 100% interest in the Northern Dancer Tungsten-Molybdenum property located in the Yukon Territory, Canada. The immediate goal of the Company is to develop the Maracás Vanadium Project by Q4 2013 and produce WO3 concentrate from the reprocessing of tungsten tailings from Currais Novos.
Largo is listed on the TSX Venture Exchange under the symbol "LGO".
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 Maracas 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.
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SOURCE: Largo Resources Ltd.
For further information:
Please refer to Largo's website: www.largoresources.com