Largo Resources Ltd. announces closing of the First Tranche of its recently announced private placement and an increase in financing size to up to Cdn$75 million
May 15, 2015 (Source: CNW) — NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES
Largo Resources Ltd. (TSX-V:LGO) (“Largo” or the “Company“) is pleased to announce today that it has closed a first tranche of its Cdn$70 million dollar Unit (as defined below) offering (the “Offering“) announced in its news release of May 13, 2015 (the “First Tranche“). The First Tranche closing resulted in proceeds to the Company of Cdn$18,221,925 from the sale of 22,777,406 Units. Of the proceeds realized from the First Tranche, a total of $12,250,000 will be used to repay in full the existing principal and interest on the Cdn$12 million convertible note facility extended to the Company by funds managed by Arias Resource Capital Management LP (the “ARC Funds“) and the remainder will be used for general corporate purposes relating to the development of the Maracas Menchen Mine.
Each Unit was sold at a price of Cdn$0.80 and consists of one common share and one half of one common share purchase warrant (the “Units“). Each whole warrant entitles the holder to acquire one further common share at a price of $1.50 per common share for a period of one year from the date of issuance.
Largo is also pleased to add that, as a result of increased demand from investors, the previously announced Cdn$70 million Offering has been increased by up to Cdn$5 million for a total Offering of up to Cdn$75 million. The Offering is being made on a brokered and non-brokered basis.
Proceeds from the First Tranche were received from Units sold entirely on a non-brokered basis and include proceeds from the sale of 15,312,498 Units purchased by the ARC Funds. The remainder of the Offering is expected to close on or about May 19, 2015.
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Largo is a growing strategic mineral company with projects in Brazil and Canada. The immediate goal of the Company is to continue 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 commodities giant 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”.
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 Menchen Mine 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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Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>