Largo Announces Closing of the First Tranche of a Private Placement for Aggregate Proceeds of $3.36 Million

Largo Resources (TSX:LGO) has announced that it has closed a first tranche of a non-brokered private placement offering of units.
As quoted in the press release:

President and Chief Executive Officer for Largo, Mark Smith, stated: “We sincerely appreciate the support of our existing shareholders, who all remain committed to the on-going success of Largo and its Maracás Menchen Mine.”
The closing of the First Tranche resulted in gross proceeds to the Company of CDN$3,359,499.75 from the sale of 7,465,555 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, and for general corporate and working capital purposes. Largo expects to close a second smaller tranche of approximately $825,000 on or about September 7, 2016 (the “Second Tranche“) which would bring the aggregate proceeds to approximately $4.18M.
Each Unit was sold at a price of CDN$0.45 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 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.
Funds managed by Arias Resource Capital Management LP (the “ARC Funds“) purchased an aggregate of 5,800,000 Units in the First Tranche for gross proceeds to the Company of CDN$2,610,000. The ARC Funds are a “Control Person” of the Company (as defined in the TSX Venture Exchange Corporate Finance Manual) by virtue of their ownership prior to the closing of the Offering of approximately 59.96% of the Company’s issued and outstanding Common Shares. Following closing of the First Tranche, the ARC Funds own 60.28% of the Company’s then issued and outstanding Common Shares (or approximately 66.97% of the Company’s then 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.
In addition, Mr. Mark Smith, president and chief executive officer and a director of Largo, subscribed for an aggregate of 555,555 Units under the Offering.

Click here to read the full press release.