Largo Announces Plans for $110 Million Equity Financing
TORONTO, ONTARIO--(Marketwire - March
11, 2011) -
NOT FOR ISSUE IN THE UNITED STATES OR TO
U.S. NEWSWIRE SERVICES
Largo Resources Ltd. ("Largo"
or the "Company") (TSX VENTURE:LGO) is pleased to announce that it
has entered into a letter of intent (the "Letter of Intent") with
Eton Park Capital Management, L.P. on behalf of one or more funds managed by it
("Eton Park"), Arias Resource Capital Management LP on behalf of one
or more funds managed by it ("ARCM") and Mackenzie Investments on
behalf of one or more funds managed by it ("Mackenzie")
(collectively, the "Lead Investors"), two of Largo's current investors.
The Lead Investors have agreed in principle, subject to certain conditions, to
participate as the lead orders in a proposed private placement financing (the
"Private Placement"), for a significant proportion of the placement,
to be completed by the concurrent issuance of Units and Subscription Receipts
(each as defined below) for aggregate gross proceeds to Largo of not less than
CDN $110 million.
The first portion of the Private
Placement will consist of the issuance of units (each a "Unit") at a
price of $0.35 per Unit for aggregate proceeds to Largo of $30,000,000 with
each Unit consisting of one common share and one-third of one common share
purchase warrant (a "Warrant") where each whole Warrant will entitle
the holder to acquire one further common share at a price of $0.50 for a period
of 48 months from the date of issue. Concurrently, Largo will issue
subscription receipts (each a "Subscription Receipt") at a price of
$0.35 per Subscription Receipt for aggregate proceeds to Largo of approximately
$80,000,000. Each Subscription Receipt will convert, at no additional cost to
the holders thereof, into one Unit upon the achievement of certain milestones.
Mark Brennan, the President and Chief
Executive Officer of Largo, commented, "We are extremely encouraged that
the Lead Investors, including Largo's two largest investors, have agreed to
lead this financing in order to secure the necessary equity funding for our
construction of the Maracas Vanadium Mine. The Private Placement represents a
financing alternative that allows Largo to maintain control over the
development of the Maracas Mine, our near term tungsten production from the
Currais Novos property and a 100% interest in the Campo Alegre property that we
believe has potential to host a significant iron ore deposit."
In connection with the entering into of
the Letter of Intent, Largo's previously announced proposed financing for its
Maracas Vanadium project (see press release dated October 27, 2010) has been
terminated.
Banco Itau BBA of Brazil has been
engaged to act on behalf of Largo in the Private Placement.
Largo intends to use gross proceeds of
the Private Placement to fund the development of Largo's mining project for the
exploitation of vanadium and other ores located mainly in the City of Maracas,
State of Bahia, Brazil, through its subsidiary entity, Vanadio de Maracas S.A.
The Private Placement is subject to,
without limitation, the successful negotiation of definitive agreements with
the Lead Investors and other investors who will participate in the Private
Placement and receipt of all necessary regulatory approvals, including TSX
Venture Exchange approval, and shareholder approval as may be required by the
TSX Venture Exchange in respect of the Private Placement. The Units and the
Subscription Receipts, and underlying securities, will be subject to a hold
period ending four months and one day following the date of issue of the Units
and Subscription Receipts, respectively.
This press release is not an offer of
securities for sale in the United States or in any other jurisdiction. The securities being offered have not been and will not be
registered under the United States Securities Act of 1933 and accordingly are
not being offered for sale and may not be offered, sold or delivered, directly
or indirectly within the United States, its possessions and other areas subject
to its jurisdiction or to, or for the account or for the benefit of a U.S.
person, except pursuant to an exemption from the registration requirements of
that Act.
About
Largo
Largo
is a Canadian-based mineral resource exploration and development company
focused on creating a world leading strategic metals company. The Company
currently holds an 80% interest in the Maracas Vanadium Project, a 100%
interest in the Currais Novos Tungsten Tailing Project, a 100% interest in the
Campo Alegre de Lourdes Iron-Vanadium Project, all in Brazil, and a 70%
interest in the Northern Dancer Tungsten-Molybdenum property located in the
Yukon Territory, Canada. The immediate goal of the Company is to develop the
Maracas Vanadium Project by Q1 2013 and begin production of WO3 concentrate
from the reprocessing of tungsten tailings from Currais Novos by June, 2011.
Largo has a very skilled management team both in Canada and Brazil with the
ability to advance these projects.
Largo
is listed on the TSX Venture Exchange under the symbol "LGO".
For
more information please refer to Largo's website: www.largoresources.com
Cautionary
Statement on Forward Looking Information
This
press release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation. Forward-looking
information includes, without limitation, statements regarding the execution of
definitive agreements, expected size of the Total Placement, proposed use of
proceeds; receipt of necessary approvals; and the requirements for additional
capital. Generally, forward-looking information 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 state that certain actions, events or results "may",
"could", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking
information is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or
achievements of the Company to be materially different from those expressed or
implied by such forward-looking information, including risks inherent in the
mining industry and risks described in the public disclosure of the Company
which is available under the profile of the Company on SEDAR at www.sedar.com.
Although the Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such information 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 information. The
Company does not undertake to update any forward-looking information, 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
FOR FURTHER INFORMATION PLEASE CONTACT:
Largo Resources Ltd.
Mark
Brennan
President & CEO
(416) 861-5886
mbrennan@largoresources.com
Largo Resources Ltd.
Darcie Ladd
Manager Business Development
416-861-5938
dladd@largoresources.com
Source: Largo Resources Ltd.