Largo closes $8.09-million tranche of placement
Largo closes $8.09-million tranche of placement
2017-12-01 07:50 ET - News Release
Mr. Mark Smith reports
LARGO RESOURCES ANNOUNCES CLOSING OF FIRST TRANCHE OF PRIVATE PLACEMENT FOR PROCEEDS OF $8 MILLION
Largo Resources Ltd. has closed the first tranche of a non-brokered private placement of units (as defined below) at a price of 82 cents per unit, for gross proceeds of up to $25-million.
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.
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 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 per cent of the corporation's then-issued and -outstanding common shares and following closing of the first tranche, these entities will own 11.43 per cent (or 16.55 per cent 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. 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 per cent 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 Dec. 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.