NioCorp’s Mark Smith to Join Largo Resources as CEO

Largo Resources (TSXV:LGO) announced that it has appointed Mark Smith as its new CEO. Smith is currently executive chairman of NioCorp Developments (TSXV:NB) and was previously president and CEO of Molycorp (NYSE:MCP).

As quoted in the press release:

Largo is pleased to announce that Mr. Mark A. Smith will become the President and Chief Executive Officer of Largo effective April 1, 2015. Mr. Smith will succeed Mr. Mark Brennan who will be retiring as the Company’s President and Chief Executive Officer effective the same date. Following his retirement, Mr. Brennan will continue to be engaged by the Company as a consultant for a period of a year to provide assistance with the transition and in order to help conclude the amendments to the Facility. Mr. Brennan met with the board of directors last fall to discuss the next stage of the Company’s development and indicated his desire to explore new career possibilities. The board appreciates Mr. Brennan’s flexibility and cooperation in leading the Company over the past several months while they worked to find suitable replacement.

Largo also provided an update on financing for development of its Maracás Menchen Mine, stating that it will need an additional C$20 million in funding in 2015:

In connection with this process, Largo has identified certain additional capital expenditures which will be required to be made over 2015. These expenditures will include the enhancement of the availability and recoveries of the leaching system and will accommodate future expansion.

As a result of these additional expenditures and existing working capital requirements from the current ramp-up, Largo anticipates that it will require additional funds from financing activities of approximately CDN $20.0 Million in 2015. The expected capital requirements could change depending on vanadium prices and production results over this period.  Included in the expected 2015 capital requirements are certain payments required to be made under its current debt facility (the “Facility“), one of which is required to be made on March 15, 2015.

The Company anticipates that it will also require additional financing over the course of 2016 of approximately CDN$30.0 million to fund its debt servicing requirements (after restructuring the existing Facility) and certain other payments.

The Company is currently negotiating a short term debt facility (the “Bridge Loan”) with potential investors to fund Project and debt servicing requirements under the Facility until May 2015.  In the absence of the Bridge Loan or other agreement with the lenders under the Facility, the Company would have insufficient cash to meet its obligations.

The Company will require additional capital by May 2015.  The Company anticipates that it will be seeking additional financing to coincide with amendments to the Facility that are currently being negotiated (see press release dated February 23, 2015).  It is anticipated that the lenders under the Facility will require additional equity capital as a condition to the contemplated amendment of the Facility.

Click here to read the Largo Resources (TSXV:LGO) press release