TORONTO, Nov. 16, 2016 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") is pleased to announce that it has signed a non-binding term sheet with its consortium of existing commercial banks in Brazil (collectively, the "Lenders") for a new debt facility (the "2017 Facilities").

The terms of the 2017 Facilities include:

• Working capital facilitiy in aggregate of up to R$144,061,027 (Brazilian reais), granted by the Lenders.
• The 2017 Facilities will be used for the payment of principal and interest falling due during 2017 on the existing loan from the Brazilian Development Bank ("the "BNDES Loan"), as well as principal and interest falling due during 2017 on existing debt facilities from certain banks within the group of Lenders.
• The grace period for the amortization of principal of the 2017 Facilities will be from the initial disbursement date thereof to March 29, 2018.
• Principal and interest payments on the 2017 Facilities become payable on a quarterly basis, in arrears, starting on March 30, 2018, over a period of 56 months.
• Each of the 2017 Facilities shall have an applicable interest rate equivalent to the Brazilian interbank rate (the "CDI Rate") plus 5.7% per annum.
• The final maturity date of the 2017 Facilities will be 72 months after the initial disbursement date.

The granting of the 2017 Facilities is conditional on the Company raising an additional US$15,000,000 for on-going working capital requirements at the Maracás Menchen Mine, prior to December 31, 2016. The Company is thereafter also obligated to raise an additional US$5,000,000, prior to June 30, 2017.

The non-binding term sheet requires the Company to comply with various financial and non-financial covenants during the term of the grace periods under both the 2017 Facilities and existing debt facilities with the Lenders.  At the completion of the grace period applicable to the 2017 Facilities, the Company will continue to comply with the covenants set forth in the existing debt facilities with the Lenders.

The signed non-binding term sheet provided by Largo will now be submitted for final approval to each of the Lenders' credit committees and will be dependent on the fulfillment of certain conditions precedent by the Company prior to closing. The process should be concluded prior to the initial disbursement date (estimated to occur on January 12, 2017).

Mark Smith, President and Chief Executive Officer for Largo, stated: "We are extremely encouraged that our Lenders are again willing to provide the Company with additional funding to restructure the Company's debt profile as it transitions out of a period of low commodity prices and progresses to the next phase of profitable operations. The ongoing support of our Lenders underscores the belief our stakeholders continue to have in the value and economic potential of the Maracás Menchen Mine."

He continued: "Now that the Maracás Menchen Mine has achieved stable and consistent operations, it is poised to benefit greatly from the production efficiencies it has gained, as well as recent substantial increases in Vanadium prices, which we anticipate will strengthen further during 2017."

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, without limitation, statements with respect to completion of a listing on a U.S. stock exchange. 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.