Largo
Closes BNDES Debt Financing Facility and Converts Subscription Receipts
Largo Resources Ltd. ("Largo"
or the "Company") is pleased to announce that it has entered
into a definitive agreement with the Business Development Bank of Brazil
("BNDES") for a Brazilian Reais R$333
million (approximately US$166million equivalent) debt
financing facility (the "Facility") for its Maracas
Project in Bahia, Brazil,
as previously disclosed in its press releases dated October 31, 2011,
March 8, 2012 and May 15, 2012. As a condition
precedent to the Facility, the Company has also entered into a guarantee
agreement (the "Guarantee") with a consortium of commercial
banks in Brazil,
led by Banco Itau BBA
S.A. and including Banco Votorantim S.A. and Banco
Bradesco S.A., (collectively the "Banks"),
to secure the Facility.
The first disbursement by
BNDES of approximately R$57 million of the Facility to Largo is
expected to occur on or around July 16, 2012.
Mark Brennan,
President and Chief Executive Officer stated: "We are enormously excited
to announce the closure of the BNDES debt-facility for Maracas. Coupled with the
funds from the equity issuance last year, the completion of the BNDES facility
concludes the funding process for the project." He continued, "This
is perhaps the most significant milestone to date in the development of the
project, and although it has been a long time in progress, we continue to
believe that the terms of this facility ultimately add significantly to the
value of returns for the project and our shareholders."
Mr. Brennan continued,
"Maracas is our cornerstone asset, and with the project financing
complete, and construction underway, we hope that both our shareholders and the
investment community will recognize that the Maracas Project is
positioned to be the premier, and most profitable, primary producer of Vanadium
in the world. We hope that the announcement of this crucial event will mark a
fundamental shift in the market's perception of Largo as a whole as we now
advance this project into a cash-flow generating mine."
Conversion of
Subscription Receipts and Escrow Release
Largo is also pleased to
announce that the 246,258,986 outstanding subscription receipts (the "Subscription
Receipts") of the Company have converted (the "Conversion")
into 295,510,782 units (the "Units") and that, concurrently,
an aggregate of Cdn$74,428,161 (the "Escrowed Funds"),
being the gross proceeds remaining in escrow from the issuance of the
Subscription Receipts pursuant to the Company's non-brokered private placement
previously announced on April 11, 2011 plus interest accrued
thereon, has been released from escrow (the "Escrow Release")
to the Company.
Upon or prior to entering
into the definitive Facility agreement, each of the conditions precedent (the
"Conditions") to the Conversion and the Escrow Release
previously disclosed in a press release dated March 9, 2012 (the
"March 2012 Release") were met or satisfied,
with the exception of Condition (ii)(G) as set out in the March 2012
Release. Each of Ashmore Cayman SPC No. 2 Limited on
behalf of and for the account of Largo Resources Segregated Portfolio ("Ashmore"),
Eton Park Capital Management, L.P. on behalf of one or more funds
managed by it (the "Eton Park Funds"), Arias Resource
Capital Management L.P. on behalf of one or more funds managed by it (the
"ARC Funds") and Mackenzie Investments on behalf of one or
more funds managed by it ("Mackenzie") (each of Ashmore,
the Eton Park Funds, the ARC Funds and Mackenzie being a "Lead Investor",
and collectively, the "Lead Investors"), on their
own behalf and on behalf of all holders of Subscription Receipts in accordance
with the terms thereof, has waived condition (ii)(G). Accordingly, each of the
Conditions has been satisfied or waived, resulting in the Conversion and the
Escrow Release.
On Conversion, each
Subscription Receipt converted into 1.2 Units, with each one (1) Unit being
comprised of one common share (each, a "Common Share") in the
capital of the Company and one-third (1/3) of one common share purchase warrant
(each whole warrant, a "Warrant"). Each Warrant entitles the
holder to acquire one further Common Share at a price of Cdn$0.35
expiring on April 8, 2015. The Common Shares and Warrants, and
any Common Shares issued upon exercise of the Warrants, remain subject to the 4
month statutory hold period which commenced the date of the amendment of the
Subscription Receipts previously announced in the March 2012
Release. The Company issued an aggregate of 295,510,782 Common Shares and
98,503,593 Warrants pursuant to the Conversion, resulting in an aggregate of
823,688,345 issued and outstanding Common Shares.
As a result of the
Conversion, the ARC Funds hold an aggregate of 138,310,327 Common Shares of
Largo, representing approximately 16.79% of the issued and outstanding Common
Shares of the Company; the Eton Park Funds hold an aggregate of 109,417,826
Common Shares of Largo, representing approximately 13.28% of the issued and
outstanding Common Shares of the Company; Ashmore
holds an aggregate of 109,417,826 Common Shares of Largo, representing
approximately 13.28% of the issued and outstanding Common Shares of the
Company; and Mackenzie holds an aggregate of 130,919,098, representing
approximately 15.89%
About Largo
Largo is a Canadian-based
mineral resource exploration and development company focused on creating a
world leading strategic metals company.� Largo
currently holds a 90% interest in the Maracás 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 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
Q2 2013 and produce WO3 concentrate from the reprocessing of
tungsten tailings from Currais Novos.�
Largo's skilled management team both in Canada
and Brazil, are
confident in their ability to advance these projects.
Largo is listed on the TSX
Venture Exchange under the symbol "LGO".