Press Release Details

Largo Resources Announces Closing of First Tranche of Private Placement for Proceeds of $8 Million

December 01, 2017

/THIS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

TORONTO, Dec. 1, 2017 /CNW/ - Largo Resources Ltd. (TSX - LGO) (the "Corporation") is pleased to announce the closing of the first tranche ("First Tranche") of a non-brokered private placement of Units (as defined below) at a price of $0.82 per Unit (the "Offering Price"), for gross proceeds of up to $25,000,000 (the "Offering").

Largo Resources Ltd. (CNW Group/Largo Resources Ltd.)

The Corporation raised gross proceeds of $8,091,769 in the First Tranche through the issuance of 9,868,012 Units. No finders' fees were paid and no finders' warrants were issued in connection with this private placement. The Corporation intends to use the proceeds for working capital and repayment of debt.

Each Unit consists of one common share in the capital of the Corporation and one half of one common share purchase warrant, with each whole warrant exercisable into one common share at a price of $1.15 for five years from the closing (each a "Unit").

Mark Smith, President and Chief Executive Officer for Largo, stated: "The ongoing support of our shareholders underscores the belief our stakeholders continue to have in Largo and its future. This financing gives us the working capital we need at corporate to focus our resources and time on operations and debt restructuring in Brazil. We anticipate that 2018 will be a strong year for vanadium and for Largo."

An entity managed by Mr. Alberto Beeck, a director of Largo, subscribed for an aggregate of 6,205,365 Units under the First Tranche for gross proceeds to the Corporation of $5,088,399. Prior to the closing of the First Tranche, entities managed or advised by Mr. Beeck owned 10.35% of the Corporation's then issued and outstanding common shares and following closing of the First Tranche, these entities will own 11.43% (or 16.55% in the event that these entities exercised all of the convertible securities held by them) of the Corporation's issued and outstanding common shares.

The sale of Units to the entity managed by Mr. Beeck constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Corporation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, as neither the fair market value of securities being issued to insiders nor the consideration being paid by insiders exceeded 25% of the Corporation's market capitalization. None of the Corporation's directors expressed any contrary views or disagreements with respect to the foregoing. The Corporation did not file a material change report 21 days prior to the closing of the Offering as the details of the participation of the insiders of the Corporation had not been confirmed at that time.

The securities issued in the private placement are subject to a hold period.

The Corporation expects the second tranche of the Offering to close on or about December 7, 2017, or such other date as the Corporation determines. It is expected that the second tranche will include the settlement of approximately $6 million of the Corporation's debt through the issuance of Units at the Offering Price. 

About Largo Resources Ltd.

Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium pentoxide 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. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to grow 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. For more information, please visit www.largoresources.com.

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable Canadian securities laws, including statements regarding the anticipated use of proceeds. Forward-looking information is not a guarantee of future performance or results, since it involves risks and uncertainties. There is no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in forward-looking statements. Some of the factors on which the forward-looking statements are premised include (but are not limited to) the lack of material changes to general economic, market and business conditions. Forward-looking information is subject to the risk that those factors will not materialize, and to other risks, including the closing of the second tranche of the private placement and potential settlement of debt. Except as required by law, the Corporation does not assume and expressly renounces any obligation to update any forward-looking information, which is only applicable on the date on which it is given.

SOURCE Largo Resources Ltd.

please contact Largo Investor Relations, info@largoresources.com

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