TORONTO, Jan. 14, 2016 /CNW/ - Largo Resources Ltd.
("Largo" or the "Company") is pleased to announce
that the Company has entered into a short term secured loan
agreement with Mr. Mark Smith, Chief
Executive Officer and a Director of Largo, pursuant to which Mr.
Smith has advanced a US$1 million
non-revolving term loan bearing an interest rate of 12% per annum
(the "Bridge Loan "). The proceeds of the Bridge Loan
will be used for ongoing working capital requirements at the
Company's Maracás Menchen Mine for the period prior to the
Company's restructuring of its existing credit facilities with its
consortium of Brazilian lenders and the related equity injection as
disclosed in its press release of December
17, 2015. The Bridge Loan will have a 30-day term, subject
to acceleration in certain events. The Bridge Loan is secured by a
general security agreement over the assets of the Company. As
consideration for entering into the Bridge Loan, the Company will
pay to Mr. Smith a loan establishment fee in the amount of
US$40,000.
The entering into of the Bridge Loan was considered and approved
by the board of directors of the Company. Mr. Smith declared a
conflict and recused himself from voting on the Bridge Loan. The
remaining directors voted unanimously to approve the Bridge
Loan.
Pursuant to Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI
61-101"), entering into the Bridge Loan with Mr. Smith 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 Bridge Loan in reliance on sections
5.5(a) and 5.7(a), respectively, of MI 61-101, as neither the fair
market value of the subject matter of the Bridge Loan, nor the fair
market value of the consideration for the Bridge Loan exceeds 25%
of the Company's market capitalization as calculated in accordance
with MI 61-101. The material change report in respect of the Bridge
Loan is being filed less than 21 days before the closing of the
Bridge Loan as the Company requires the financing it received under
the Bridge Loan immediately to finance operating costs of the
Company's Maracás Menchen Mine.
About Largo
Largo (TSX-V: LGO) is a growing strategic mineral company
focused on the production of vanadium pentoxide at its Vanadio de
Maracás Menchen Mine. Largo's Maracás Menchen Mine boasts the
highest grade vanadium deposit yet discovered and is expected to be
a low cost producer. With an off-take in place with Glencore, Largo
is well positioned to become a leading producer of vanadium
globally and is expected to generate substantial cash-flows.
Vanadium is primarily used as an alloy to strengthen steel and
reduce its weight. Vanadium enhanced steels are used in a vast and
growing range of products that are used and encountered every day;
including, rebar, automobiles, transport infrastructure etc. With
consumption increasing at a compound annual growth rate of over 8%
for the past several years (Roskill, 2015), vanadium is a
bourgeoning commodity which lacks opportunities for investment in
the wider market place. As trends in the steel industry now demand
increasingly stronger and lighter products for advanced
applications, the use of vanadium is expected to continue this
growth over the medium and long term.
Largo also has interests in a portfolio of other projects,
including: a 100% interest in the Currais Novos Tungsten Tailings
Project in Brazil; a 100% interest
in the Campo Alegre de Lourdes Iron-Vanadium Project in
Brazil; and a 100% interest in the
Northern Dancer Tungsten-Molybdenum property in the Yukon Territory, Canada.
Largo is listed on the TSX Venture Exchange under the symbol
"LGO".
For more information please refer to Largo's website:
www.largoresources.com
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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 any financings; Largo's development potential and
timetable of its operating, development and exploration assets;
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". All
information contained in this news release, other than statements
of current and historical fact, is forward looking information.
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.
Forward-looking statements are based on the opinions and
estimates of management as of the date such statements are made.
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. Readers should also review the risks and uncertainties
sections of Largo's annual and interim MD&As.
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SOURCE Largo Resources Ltd.