Best-efforts offering sells 93.75 million units with one-year warrants
By Devika Patel
Knoxville, Tenn., May 15 – Largo Resources Ltd. said it raised C$18.22 million in the first tranche of a private placement of units. The deal has also been increased to C$75 million.
Mackie Research Capital Corp. is the lead agent and bookrunner for the brokered portion of the deal, which priced for C$50 million with a C$7.5 million greenshoe on May 7. The offering was amended to include a non-brokered component and was increased to C$70 million on May 13. The brokered portion is being conducted on a best-efforts basis.
The company is now selling 93.75 million units of one common share and one half-share warrant at C$0.80 per unit. It sold 22,777,406 units in the initial tranche on a non-brokered basis.
Each whole warrant is exercisable at C$1.50 for one year. The strike price is a 94.81% premium to the May 6 closing share price of C$0.77.
Funds managed by Arias Resource Capital Management LP are expected to buy 63,312,500 units for C$50.65 million. The ARC Funds bought 15,312,498 units in the first tranche.
A minimum of $35 million must be raised to restructure the company's Maracas Menchen Mine debt facilities.
Settlement of the second and final tranche is expected May 19.
Proceeds will be used for development of the Maracas Menchen Mine and general corporate purposes. From the first-tranche proceeds, the company used C$12.25 million to repay the company’s C$12 million convertible note facility with Arias Resource Capital Management LP.
Largo is a Toronto-based resource development and exploration company.
| Issuer: | Largo Resources Ltd.
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| Issue: | Units of one common share and one half-share warrant
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| Amount: | C$75 million
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| Units: | 93.75 million
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| Price: | C$0.80
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| Warrants: | One half-share warrant per unit
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| Warrant expiration: | One year
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| Warrant strike price: | C$1.50
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| Agent: | Mackie Research Capital Corp. (lead), non-brokered
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| Investor: | Arias Resource Capital Management LP (for C$50.65 million)
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| Pricing date: | May 7
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| Upsized: | May 13, May 15
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| Settlement date: | May 15 (for C$18,221,925), May 19
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| Stock symbol: | TSX Venture: LGO
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| Stock price: | C$0.77 at close May 6
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| Market capitalization: | C$95.06 million
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