Largo Inc (LGO)

[Slashnuts]

CEO Increases Investment as Largo Closes Final Tranche

March 03, 2016

Largo Resources Ltd.is pleased to announce today that it closed the second and final tranche (the "Second Tranche") of its Unit offering (the "Offering") previously announced in its news release of January 19, 2016. The closing of the Second Tranche resulted in gross proceeds to the Company of Cdn$23,357,649 from the sale of 133,472,280 Units which, together with the first tranche of the Offering (see the Company's news release of January 29, 2016), has resulted in aggregate proceeds to the Company of approximately US$26.8 million (or Cdn$36,643,631) from the sale of an aggregate of 209,392,178 Units. The proceeds realized from the Second Tranche will be used for ongoing working capital requirements at the Company's Maracás Menchen Mine which is a condition of the Company's restructuring of its existing credit and export facilities with its consortium of Brazilian lenders (as previously disclosed in the Company's press release of March 2, 2016) and for general corporate and working capital purposes.

Mark Smith, President and Chief Executive Officer to the Company, stated: "We are extremely pleased to have concluded this private placement. I would like to sincerely thank all who participated in this placement for their continued support of the Maracas Menchen Mine Project and the Largo team, and, to reiterate that we will continue to work hard to realize the Company's full value."

Each Unit was sold at a price of CDN$0.175 and consists of one common share of the Company (each, a "Common Shares"), and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant issued pursuant to the Second Tranche of the Offering will be exercisable into one Common Share at a price of CDN$0.29 per share for a period of five years from closing of the Second Tranche.

Funds managed by Arias Resource Capital Management LP (the "ARC Funds") purchased an aggregate of 91,157,202 Units in the Second Tranche for gross proceeds to the Company of CDN$15,952,510.35. The ARC Funds are a "Control Person" of the Company (as defined in the TSX Venture Exchange Corporate Finance Manual). Prior to the closing of the Second Tranche, the ARC Funds owned approximately 55.98% of the Company's issued and outstanding Common Shares and, following closing of the Second Tranche, the ARC Funds own approximately 59.96% of the Company's then issued and outstanding Common Shares (or approximately 68.68% of the Company's issued and outstanding Common Shares in the event that the ARC Funds exercised all of the convertible securities held by them). The shareholders of the Company approved the creation of the ARC Funds as a Control Person of the Company at the annual and special meeting of the shareholders of the Company held on June 27, 2013.

As a condition precedent to ARC Funds' participation in the Offering , Largo and the ARC Funds amended and restated that certain director nomination agreement dated May 22, 2015 pursuant to which the ARC Funds have the right to, as a group, designate one additional person to be nominated for election to Largo's board of directors by Largo shareholders, including at the next annual meeting of Largo shareholders, for so long as the ARC Funds, whether individually or together, own at least 50% of the issued and outstanding Common Shares. These nomination rights are in addition to the ARC Funds' existing nomination rights more fully set out in the Company's press release issued on May 22, 2015 and, accordingly, assuming the ARC Funds ownership remains equal to or above 50% of the issued and outstanding Common Shares, the ARC Funds will designate four of the seven persons to be nominated for election as directors at the next annual meeting of Largo's shareholders.

In addition, Mr. Mark Smith, President and Chief Executive Officer and a director of Largo, subscribed for 1,718,000 Units in the Second Tranche

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