Big $23.6Million Private-Placement........ What does LARGO want ?
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Tungsten Mines ?
Making a run for Cantung & Mactung maybe ? We shall see.
$NATUF
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Largo announces private placement for aggregate proceeds of up to CDN$23.58M
Dec 28, 2016
OTC Disclosure & News Service
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Largo announces private placement for aggregate proceeds of up to CDN$23.58M
Canada NewsWire
TORONTO, Dec. 28, 2016
TORONTO, Dec. 28, 2016 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") announces a proposed non-brokered private placement financing (the "Offering") of up to 52,400,000 units ("Units") of the Company for aggregate gross proceeds of up to CDN$23,580,000.
Each Unit will be sold at a price of CDN$0.45, which price is equal to a 13.5% discount to the 5-day weighted average price of the common shares of the Company (the "Common Shares") on the Toronto Stock Exchange (the "TSX") on December 13, 2016, the day prior to the date on which the independent special committee of the board of directors of the Company approved the terms of the Offering, and a 4% discount to the 5-day weighted average price of the Common Shares on the TSX on December 22, 2016, the day prior to the date the Company filed for approval of the Offering with the TSX. Each Unit shall consist of one Common Share and one common share purchase warrant (a "Warrant"). Each Warrant will be exercisable into one Common Share at a price of CDN$0.65 per share for a period of three years from closing of the Offering. All securities issued in the Offering will be subject to a four-month hold from the date of issuance.
Insiders of the Company (the "Insiders"), including certain funds managed by Arias Resource Capital Management LP (the "ARC Funds") and certain entities controlled by Mr. Alberto Beeck, a director of the Company, may purchase up to the full number of Units offered for sale under the Offering. The Offering will not result in a change of control of the Company.
Shareholder Approval
As set out in the Company's press release of November 16, 2016, the syndicate of Brazilian commercial lenders (the "Lenders") under the Company's existing debt facilities is requiring an injection of working capital into the Company's operating subsidiary of not less than US$15 million dollars prior to December 31, 2016 as a condition of granting a new debt facility to the Company (the "2017 Facilities") which would have the effect of pushing back principal and interest payments on the Company's existing debt facilities for an additional calendar year. Subsequently, the Lenders agreed to extend the December 31, 2016 date to January 10, 2017. Absent the 2017 Facilities, the Company will be required to begin making principal and interest payments effective January 15, 2017.
The Company currently has 423,765,993 issued and outstanding Common Shares on a non-diluted basis. There will be 476,165,993 Common Shares issued and outstanding on a non-diluted basis following closing of the Offering (assuming the issuance of the maximum number of Units under the Offering). Insiders may purchase up to the full number of Units being offered for sale under the Offering, Accordingly, an aggregate of 104.8 million Common Shares (including Common Shares issuable upon the exercise of the Warrants) representing approximately 24.7% of the current number of issued and outstanding Common Shares, could be issued to Insiders in the Offering. Over the course of the past six months and assuming closing of the Offering and the acquisition of all of the Units by Insiders under the Offering, an aggregate of approximately 115 million Common Shares (including Common Shares issuable upon the exercise of warrants) representing approximately 27.9% of the number of issued and outstanding Common Shares will have been issued to Insiders.
