Largo Resources announces C$7 million non-brokered private placement financing
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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
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 WO(3) 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.
NEITHER THE TSX VENTURE EXCHANGE (NOR ITS REGULATORY SERVICE PROVIDER) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
Please refer to Largo's website:www.largoresources.com
Darcie Ladd, Business Development Manager Phone: 416-861-9406 Fax:
416-861-9747 e-mail:email@example.com Web
SOURCE: Largo Resources Ltd.
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