Largo Resources Ltd
Yukon Territory - Brazil - Ecuador: Gold-Copper, Vanadium PGE , tungsten/molybdenum
Message: Largo Earns Interest in Maracas Vanadium Project in Bahia, Brazil
Largo Resources Ltd.
TSX VENTURE: LGO
TORONTO, ONTARIO--(Marketwire - May 5, 2008) - Largo Resources Ltd. (TSX VENTURE:LGO) ("Largo") is pleased to announce that it has obtained its initial interest in the Maracas vanadium project in Brazil by satisfying its obligations under the April 2007 purchase and sale agreement.
Pursuant to the agreement, Largo has made an aggregate payment of US$4 million to Odbpar Investimentos S.A. and Companhia Vale Do Rio Doce in consideration of a 50% plus 1 share interest in Companhia de Maracas (the "Holding Company"). The Holding Company holds a 95.38% equity interest in Vanadio de Maracas Ltda., an entity that owns the mining rights for vanadium in respect of the Maracas property. MNFB. Largo's partners in the Maracas property shall be provided a 4.5% interest in Companhia de Maracas.
As announced on December 12, 2007, Largo has initiated a Feasibility Study on the property and expects results of the study by the end of June 2008.
Mark Brennan, the President and Chief Executive Officer of Largo, commented, "We are extremely pleased to satisfy our commitments and earn our initial interest in the Maracas property. In its December 2007 scoping study on the project, Micon International projected robust economics for the project. Earning this initial interest is our latest step towards earning up to an 80% interest in the Holding Company and bringing the project into production."
Largo is required to make a final payment of US$5 million by November 1, 2008 in order to acquire an additional 35% less 1 share interest in the Holding Company's issued and outstanding shares. Largo has agreed to pay interest of 5.5% per annum to the Vendors in respect of the portion of the purchase price not yet paid. Largo and its partner also have the option to acquire a further 10% interest in the Holding Company's shares with a payment of $8 million dollars by November 1, 2008.
In connection with the payment of US$4 million under the purchase and sale agreement, Largo has borrowed US$4.5 million from Aberdeen International Inc. pursuant to a convertible debenture. At any time, Aberdeen can elect to convert some or all of the principal and interest outstanding under the debenture into Largo common shares at a price of $0.65 per common share. The convertible debenture matures and is repayable in 60 days, but Largo can extend the maturity date to November 1, 2008 upon payment of US$100,000. Amounts outstanding under the debenture shall be secured against the assets of Largo, including its shares of the Holding Company. In consideration for the loan, Largo is to pay a fee of US$250,000 and, subject to regulatory approval, issue 2.5 million share purchase warrants to Aberdeen. Each share purchase warrant will be exercisable for one Largo common share at a price of $0.55 for the twelve months following issue and $0.60 for the subsequent six months. Largo and Aberdeen have two directors and one officer in common and, as a result, are non-arm`s length parties for the purposes of the TSX Venture Exchange.
About Largo
Largo Resources is a Canadian natural resource development and exploration company with two advanced stage projects: the Maracas Vanadium-PGM deposit in Brazil and the Northern Dancer Tungsten-Molybdenum deposit in the Yukon. Largo also has a large (60,000 hectare) land position and prospective gold exploration properties in Ecuador. The company is listed on the TSX Venture Exchange under the symbol LGO.
For more information please refer to Largo's website: www.largoresources.com
TSX VENTURE: LGO
May 05, 2008 10:05 ET
Largo Earns Interest in Maracas Vanadium Project in Bahia, Brazil
Pursuant to the agreement, Largo has made an aggregate payment of US$4 million to Odbpar Investimentos S.A. and Companhia Vale Do Rio Doce in consideration of a 50% plus 1 share interest in Companhia de Maracas (the "Holding Company"). The Holding Company holds a 95.38% equity interest in Vanadio de Maracas Ltda., an entity that owns the mining rights for vanadium in respect of the Maracas property. MNFB. Largo's partners in the Maracas property shall be provided a 4.5% interest in Companhia de Maracas.
As announced on December 12, 2007, Largo has initiated a Feasibility Study on the property and expects results of the study by the end of June 2008.
Mark Brennan, the President and Chief Executive Officer of Largo, commented, "We are extremely pleased to satisfy our commitments and earn our initial interest in the Maracas property. In its December 2007 scoping study on the project, Micon International projected robust economics for the project. Earning this initial interest is our latest step towards earning up to an 80% interest in the Holding Company and bringing the project into production."
Largo is required to make a final payment of US$5 million by November 1, 2008 in order to acquire an additional 35% less 1 share interest in the Holding Company's issued and outstanding shares. Largo has agreed to pay interest of 5.5% per annum to the Vendors in respect of the portion of the purchase price not yet paid. Largo and its partner also have the option to acquire a further 10% interest in the Holding Company's shares with a payment of $8 million dollars by November 1, 2008.
In connection with the payment of US$4 million under the purchase and sale agreement, Largo has borrowed US$4.5 million from Aberdeen International Inc. pursuant to a convertible debenture. At any time, Aberdeen can elect to convert some or all of the principal and interest outstanding under the debenture into Largo common shares at a price of $0.65 per common share. The convertible debenture matures and is repayable in 60 days, but Largo can extend the maturity date to November 1, 2008 upon payment of US$100,000. Amounts outstanding under the debenture shall be secured against the assets of Largo, including its shares of the Holding Company. In consideration for the loan, Largo is to pay a fee of US$250,000 and, subject to regulatory approval, issue 2.5 million share purchase warrants to Aberdeen. Each share purchase warrant will be exercisable for one Largo common share at a price of $0.55 for the twelve months following issue and $0.60 for the subsequent six months. Largo and Aberdeen have two directors and one officer in common and, as a result, are non-arm`s length parties for the purposes of the TSX Venture Exchange.
About Largo
Largo Resources is a Canadian natural resource development and exploration company with two advanced stage projects: the Maracas Vanadium-PGM deposit in Brazil and the Northern Dancer Tungsten-Molybdenum deposit in the Yukon. Largo also has a large (60,000 hectare) land position and prospective gold exploration properties in Ecuador. The company is listed on the TSX Venture Exchange under the symbol LGO.
For more information please refer to Largo's website: www.largoresources.com
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