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Largo Resources Ltd

Published : July 03rd, 2012

Largo Closes BNDES Debt Financing Facility and Converts Subscription Receipts

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Keywords :   Brazil | Iron | Lead | Molybdenum | Tungsten |

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".

Data and Statistics for these countries : Brazil | All
Gold and Silver Prices for these countries : Brazil | All

Largo Resources Ltd

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CODE : LGO.V
ISIN : CA5171031076
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Largo Res. is a gold and copper exploration company based in Canada.

Largo Res. develops gold, copper and tungsten in Brazil, and holds various exploration projects in Canada.

Its main asset in development is CURRIAS NOVO in Brazil and its main exploration properties are MACUCHI in Ecuador, MARACAS in Brazil and NORTHERN DANCER in Canada.

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Financings of Largo Resources Ltd
7/3/2012Largo Closes BNDES Debt Financing Facility and Converts Subs...
3/9/2012Largo Provides Update on BNDES Debt Financing Facility
4/12/2011(Maracas)Largo Closes Financing Intended to Fund Development of Its M...
3/29/2011Largo Announces Increase to Previously Announced Equity Offe...
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6/29/2012Largo announces the election of David Brace, Wayne Egan and ...
Project news of Largo Resources Ltd
7/5/2016- Largo Achieves a New Monthly Production Record of 801 Tonn...
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5/23/2013Another Construction Target Reached
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1/21/2013/R E P E A T -- Largo announces positive preliminary economi...
11/2/2012(Maracas)New Videos of Construction at the Maracas Vanadium Project
9/21/2012(Maracas)New Video from the Maracas Vanadium Project
9/13/2012(Maracas)Largo announces results of a technical report for its Maraca...
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