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Largo Resources (TSXV:LGO) has agreed to a term sheet with respect to a $12 million non-revolving, convertible term loan facility with an interest rate of 20 percent per year. Funds will be used to finance develop costs for Largo’s Maracas Menchen mine in Brazil.
Largo Resources (TSXV:LGO) has agreed to a term sheet with respect to a $12 million non-revolving, convertible term loan facility with an interest rate of 20 percent per year. Funds will be used to finance develop costs for Largo’s Maracas Menchen mine in Brazil.
As quoted in the press release:
The Bridge Loan remains subject to final TSX Venture Exchange acceptance of requisite regulatory filings and the execution of definitive agreements. The Bridge Loan is expected to close on or about Friday, March 13, 2015.
The Bridge Loan will have a 6-month term and will be drawn down over a number of weeks on a bi-weekly basis. It will be secured by a pledge of securities and guaranteed by a Largo subsidiary, Campo Alegre de Lourdes Ltda.
All or any portion of the outstanding indebtedness under the Bridge Loan will be convertible into common shares of Largo (“Common Shares”) at the option of the ARC Funds at a conversion price of CDN$1.01 per Common Share (being the closing price of the Common Shares on the TSXV on March 10, 2015). The conversion of outstanding indebtedness will be subject to standard anti-dilution provisions.
The Bridge Loan will be subject to mandatory repayment if Largo raises any additional financing (in an amount equal to the net proceeds of such financing transaction), upon a change of control of Largo or if the loan is accelerated upon an event of default. In case of default, interest will increase to 23% per annum on the amount outstanding under the Bridge Loan.
Click here to read the Largo Resources (TSXV:LGO) press release