TORONTO, Sept. 7, 2016 /CNW/ - Largo Resources Ltd. (TSX: LGO) (OTCQB: LGORF) ("Largo" or the "Company") is pleased to announce today that it has closed a first tranche (the "First Tranche") of a non-brokered private placement offering (the "Offering") of Units (as defined below).

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.

The Offering was considered and approved by the board of directors of the Company. Mark Smith, president, chief executive officer and a director of Largo declared a conflict and recused himself from voting on the Offering.  J. Alberto Arias, a director of Largo who is also the sole director of each of the general partners of the ARC Funds and indirectly controls Arias Resource Capital Management LP and Sam Abraham, a director of Largo and an employee of Arias Resource Capital Management LP, also declared a conflict and recused themselves from voting on the Offering due to the ARC Funds participation in the Offering. The remaining directors voted unanimously to approve the Offering.  

Pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the purchase by the ARC Funds of the Units under the Offering is a "related party transaction". The Company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Offering in reliance of sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as the fair market value of the Units being sold under the Offering to the ARC Funds does not exceed 25% of the Corporation's market capitalization. The material change report is being filed less than 21 days before the closing of the Offering as the Company requires the consideration it will receive in connection with the Offering immediately for working capital purposes.

About Largo

Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium pentoxide at its Vanadio de Maracás Menchen Mine. 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. For more information, please visit www.largoresources.com.

Cautionary Notes:

This press release contains forward-looking information under Canadian securities legislation.  Forward-looking information includes, but is not limited to, negotiation of the Definitive Agreement and completion of the transactions contemplated in the MOU, 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.

Neither the Toronto Stock Exchange (nor its regulatory service provider) accepts responsibility for the adequacy or accuracy of this release

SOURCE Largo Resources Ltd.