Largo Announces Closing of the First Tranche of its Current Private Placement Offering for Aggregate Gross Proceeds of $15.09 Million

Largo Resources (TSX:LGO) has announced that it has closed the first tranche of its non-brokered private placement offering as disclosed in its news release dated December 28, 2016.
As quoted in the press release:

The closing of the First Tranche resulted in gross proceeds to the Company of CDN$15,085,803.15 from the sale of 33,524,007 units of the Company (the “Units“). The proceeds realized from the First Tranche will be used for ongoing working capital requirements at the Company’s Maracás Menchen Mine (see below), and for general corporate and working capital purposes.
Each Unit was sold at a price of CDN$0.45 and consists of one common share of the Company (each, a “Common Share“) and one common share purchase warrant (each whole warrant, a “Warrant“). Each Warrant issued in the First Tranche 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 First Tranche. All securities issued in the Offering will be subject to a four-month hold from the date of issuance.
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 required an injection of working capital (the “Working Capital Injection Condition“) into the Company’s operating subsidiary of not less than US$15 million prior to December 31, 2016 as a condition of granting a new debt facility to the Company (the “2017Facilities“) which would have the effect of pushing back principal and interest payments on the Company’s existing debt facilities for an additional calendar year. Absent the 2017 Facilities, the Company would be required to begin making principal and interest payments effective January 15, 2017. Subsequently, as disclosed in the Company’s press release ofDecember 28, 2016, the Lenders agreed to extend the December 31, 2016 date to January 10, 2017.
The Lenders subsequently agreed to amend the payment terms of the Working Capital Injection Condition to provide for an injection into the Company’s operating subsidiary of not less than US$10 million prior to January 10, 2017, with the remaining US$5 million being required by March 15, 2017. Of the gross proceeds from the First Tranche, US$10 million will be used to satisfy the initial payment under the Working Capital Injection Condition.

Click here to read the full press release.