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TORONTO, March 2, 2016 /CNW/ - Largo Resources Ltd.
(TSX-V:LGO) ("Largo" or the "Company") is pleased to
announce that, further to its press release of January 29, 2016, Vanadio de Maracás SA
("VMSA"), the Company's operating subsidiary, has entered
into definitive agreements with its consortium of existing
commercial banks in Brazil
(collectively, the "Lenders") for a new debt facility (the
"New Facility") and the restructuring of its export credit
facilities (the "Export Facilities") for its Maracás Menchen
Mine.
The terms of the New Facility, consistent with the previously
announced binding term sheet with the Lenders, include:
- Working capital facility of up to R$104,596,000 (Brazilian reais), disbursed in 11
monthly payments over 2016.
- Working capital facility in an amount equivalent to the
mark-to-market value of the swap contract applicable to one of the
Company's Export Facilities.
- Margin equal to the Interbank rate (CDI) + 5.70% per
annum.
- Two-year grace period on the payment of interest and principal,
measured from the disbursement date. Quarterly repayment (in
arrears) of the New Facility commencing after the end of the grace
period.
- Final maturity 84 months after the disbursement date.
- Use of proceeds strictly to pay interest and principal falling
due under the Company's existing construction debt facility and to
pay the swap settlements pertaining to one of the Company's Export
Facilities.
The restructuring of the Export Facilities includes an amendment
confirming that the principal and interest installments due for the
12 months after the Disbursement Date will be payable on the same
payment terms of the New Facility, including, the addition of a
grace period.
Funding under the New Facility and the implementation of
amendments to the Export Facilities remain contingent on Largo and
VMSA securing an additional US$ 15
million in equity funding and the filing of the definitive
documents with certain registries in Brazil. In order to meet
this financial condition, Largo expects to the close the second and
final tranche of its previously announced equity financing
imminently (see January 19 and 29,
2016 press releases).
Concurrently with the New Facility, Largo has agreed to new
commercial terms for an up to US $4,000,000 loan facility with Banco Pine to roll
over its existing facility on roughly the same terms as the New
Facility and VMSA has also agreed to commercial terms with Banco
Pine for a new up to R$ 80,000,000
facility to close out its existing swap contracts with Banco
Pine.
Mark Smith, President and Chief
Executive Officer for Largo, stated: "With a world class
vanadium resource, well established metallurgy, low unit production
costs and a high performance team, Largo has been able to
successfully restructure its debt and is now in a position to close
the final tranche of its current financing imminently. With the
changes occurring in the world-wide vanadium market, including,
bankruptcy proceedings for several South African vanadium
producers, similar troubles in Russia and fundamental changes in the Chinese
vanadium industry, including the cessation of operations at several
older vanadium slag producing steel mills and the increased
importation of seaborne iron ore that does not contain vanadium,
Largo is now well positioned for success as the world faces a
potentially significant reduction in vanadium supply."
About Largo
Largo (TSX-V: LGO) is a growing strategic mineral company
focused on continuing production at its Vanadio de Maracás Menchen
Mine.
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 a
compound annual growth rate of over 6% for the past several years
(Roskill, 2013), 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
Join our mailing list:
www.largoresources.com/English/about-us/contact/default.aspx
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.