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Largo Resources Ltd.
("Largo" or the "Company") (TSX VENTURE: LGO) is pleased
to announce today that is has closed its previously announced non-brokered
private placement (the "Private Placement") through the concurrent
issuance of 85,714,286 units (each, a "Unit") and 242,718,844
subscription receipts (each a "Subscription Receipt") for aggregate
gross proceeds to the Company of $114,951,595.50, all as previously described
in press releases dated March 11, 2011 and March 25, 2011.
Each Unit and each
Subscription Receipt was issued at a price of $0.35 per Unit or Subscription
Receipt. Each Unit is comprised of one common share (each, a "Common
Share") and one-third of one common share purchase warrant (each whole
warrant, a "Warrant") where each Warrant entitles the holder to acquire
one further Common Share at a price of $0.50 for a period of 48 months from
the date of issuance. Each Subscription Receipt is convertible, at no
additional cost, into one Unit on the same terms above upon the satisfaction
of certain escrow release conditions or if exercised at the discretion of the
holder.
Largo is pleased to
announce that each of Ashmore Cayman SPC No. 2
Limited on behalf of and for the account of Largo Resources Segregated
Portfolio ("Ashmore"), Eton Park Master
Fund, Ltd. and EP Cayman, Ltd. (collectively, the "Eton Park
Funds"), Arias Resource Capital Fund L.P. and Arias Resource Capital
Fund II L.P. (collectively, the "ARC Funds") (each of Ashmore, the Eton Park Funds and the ARC Funds being a
"Lead Investor", and collectively, the "Lead Investors")
and Mackenzie Investments on behalf of one or more funds managed by it
("Mackenzie") participated as the lead orders in the Private
Placement and acquired a significant proportion of the Units and Subscription
Receipts issued 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. (the
"Maracas Project").
Banco Itau BBA
S.A. acted as sole advisor to Largo in this Private Placement. According to
Felipe Mattar, vice president at Itau BBA: "We are honoured
to have advised Largo in this ground-breaking deal for Vanadium in Brazil
with such a high quality group of investors. We are confident that this will
open grounds for other natural resources opportunities as investors from all
over the world have been seeking opportunities of this kind in Brazil."
Contemporaneously
with the closing of the Private Placement, Largo and each of the Lead
Investors entered into an investor nomination rights and governance agreement
(the "Governance Agreement") pursuant to which each of the Lead
Investors is each entitled to nominate one director to Largo's board of directors.
In addition, each of the Lead Investors have been granted pre-emptive rights
to subscribe for Common Shares or other securities convertible or
exchangeable into Common Shares to be issued in connection with any equity
financing (collectively, the "Offered Securities") at the same
price and on the same terms as Largo intends to offer the Offered Securities
to potential investors. In connection with the Governance Agreement, upon
closing of the Private Placement Largo has increased its board to seven
members. To accommodate the board appointees, Dr. Bill Pearson has resigned
from the board of directors but will continue working with the Company as
part of Largo's advisory board. Largo would like to thank Dr. Pearson for his
contributions to the Company to date. The board of directors will now be
comprised of Mark Brennan, Stan Bharti, Bill
Clarke, Michael Hoffman, Brent de Jong, J. Alberto
Arias and Dirk Donath.
Pursuant to the
Governance Agreement, certain decisions in respect of Largo and its subsidiaries
(collectively, the "Group") require the approval of six of Largo's
seven directors. Such matters include (a) certain amendments to the articles
or by-laws of any member of the Group; (b) approving or amending an annual
business plan for Largo; (c) appointing, changing or removing senior officers
of Largo or any of its affiliates as well as determining certain aspects of
their compensation; (d) approving any material transactions of any member of
the Group; (e) approving use of any proceeds of the Private Placement for any
purpose other than the development of the Maracas Project; and (f) decisions
in respect of, inter alia, dividends, distributions and issuing any security
of any member of the Group (except Largo) other than to another member of the
Group.
The Governance
Agreement will automatically terminate: (a) after the first continuous 45 day
period during which the aggregate ownership of Common Shares by the Lead
Investors, collectively, is reduced to less than 10% of the issued and
outstanding Common Shares; or (b) if at any time one person (or group of
persons acting jointly or in concert) acquires that number of Common Shares
which would grant such person (or group of persons acting jointly or in
concert) the right to exercise votes representing not less than 66 2/3% of
the Common Shares.
In connection with
their advisory role to the Company in respect of the Private Placement, Banco Itau BBA S.A. received a
commission equal to 5% of the aggregate gross proceeds. In addition, certain
finders will be paid a finders fee equal to 5% of
the subscriptions raised by such finders.
Largo is pleased to
announce that it will hold a shareholder conference call on Tuesday, April
19, 2011 at 11:00 am EST. Call-in numbers are as follows:
International: +1 416-340-2216
Toll Free: +1
866-226-1729
Toronto area: 416-340-2216
Mark Brennan,
President and CEO of Largo Resources stated: "The closing of this
financing signals an exciting new stage in Largo's development and offers an
excellent opportunity to provide shareholders with a live update from our
management team. With funding secured for our Maracas Vanadium Project and
production set to commence at our Currais Novos Tungsten Project this July, 2011 will be an
important year for Largo and we look forward to sharing our recent
achievements and our plans for continued growth with shareholders and the
investment community alike."
For those unable to
attend, a playback recording will be posted on Largo's website at www.largoresources.com.
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 90% interest in the Maracas 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 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
Disclaimer
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; final receipt of all
regulatory approval, including the approval of the TSX Venture Exchange; the
effectiveness of the new board of directors; Largo's development potential
and timetable of the Maracas, Currais Novos and Northern Dancer projects; Largo's ability to
raise additional funds necessary; the future price of vanadium, 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.
Contacts:
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
www.largoresources.com
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