TORONTO, Dec. 17, 2015 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to announce that it has signed an indicative term sheet 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 include:

• Working capital facility of R$104,596,000 (Brazilian reais), disbursed in 12 monthly disbursements from January 12, 2016 (the "Disbursement Date").
• 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 commences 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 the amendment to set forth that the principal and interest installments due for the 12 months after the Disbursement Date shall be payable on the same payment terms of the New Facility.

The New Facility and the restructuring of the Export Facilities is conditional on the Company raising an additional US$20,000,000 for on-going working capital requirements at the Maracás Menchen Mine.

If required by the Company and agreed by the Lenders, the indicative term sheet also contemplates an additional working capital facility of up to R$117,827,700 ("Additional Facility") with a one-year grace period on the payment of principal and interest under both the Export Facilities conditional upon, among other things, the Company raising further working capital in an amount to be agreed with the Lenders.

The indicative term sheet requires the Company to comply with various financial and non-financial covenants during the term of the grace periods under both the New Facility and Additional Facility.  At the completion of the grace periods, the Company will continue to comply with the covenants set forth in the existing debt facilities.

The signed indicative term sheet provided by Largo will now be submitted for final approval from each of the Lenders' credit committees and will be dependent on the fulfillment of certain conditions precedent by the Company prior to closing. Largo anticipates that the process will be concluded prior to the Disbursement Date.

Mark Smith, President and Chief Executive Officer for Largo, stated: "We are extremely pleased with the commitment and willingness of our Lenders to provide the Company with additional funding and to restructure the Company's debt profile during a period of very low commodity prices and general market weakness in the mining industry.  This new support underscores the belief our Lenders and stakeholders have in the value and success of the Maracás Menchen Mine."

He continued: "We believe the Maracás Menchen Mine has now proven its technical merit and will benefit greatly from any increase in Vanadium prices from the current historic lows."

Largo also announces that its wholly owned subsidiary Vanadio de Maracás has entered into a R$867,447 short-term bridge loan facility repayable on January 15, 2016 with a separate existing lender and Largo as guarantor, in order to fund certain payment obligations in respect of currency swap contracts with said existing lender.

About Largo
Largo (TSX-V: LGO) is a growing strategic mineral company focused on continuing to ramp-up production at its Vanadio de Maracás Menchen Mine. Largo's Maracás Menchen Mine boasts the highest grade vanadium deposit yet discovered and is expected to be a low cost producer. With an off-take in place with Glencore, Largo is well positioned to become a leading producer of vanadium globally and is expected to generate substantial cash-flows.

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 consumption increasing at a compound annual growth rate of over 8% for the past several years (Roskill, 2015), 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

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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.