Photo by: Largo Resources
TORONTO (miningweekly.com) – Vanadium producer Largo Resources on Monday launched a C$30-million equity placement to help fund operating capital needs as its flagship Maracas Menchen mine, in Brazil, which was ramping up to the first phase’s boilerplate capacity of 9 600 t/y.
Under the nonbrokered private placement, Largo planned to issue up to 107.14-million units at a price of C$0.28 apiece. Each unit would comprise one common share and one share purchase warrant, exercisable at a strike price of C$0.35 apiece for three years from closing.
Depending on the company raising C$15-million from other investors, TSX-V-listed Largo said it expected about half of the offering, or up to 53.57-million units, to be acquired by existing shareholder Arias Resource Capital Management (ARC Funds), and C$1.6-million of the financing, or up to 5.7-million units, to be taken up by stakeholder Mackenzie Investments.
ARC Funds held about 25.8% of Largo and, following the placement, would own up to 28.18%, or 33.6%, if all convertible securities were exercised.
After the transition had closed, Mackenzie would own about 15.46% of Largo and, after completion of the offering, was expected to hold up to 17.73% if all warrants were exercised.
The company added that other directors and officers of Largo could also subscribe for up to 145 000 units in the financing, pending regulatory approvals expected to close on October 3.
Earlier this month, Largo made its second shipment of vanadium pentoxide from the mine after an August start-up. With delivery and material inspection protocol now firmly established, shipments from the project were expected each week.
Largo expects output to reach a rate of 9 600 t/y of vanadium pentoxide within the next 12 months, at cash costs of between $5.50/kg and $6/kg. The second phase of the project will see output rise to 14 400 t/y within the next three years, potentially giving the company the ability to supply up to 10% of the global demand.
The Maracas Menchen deposit was regarded as the richest, highest-grade vanadium deposit in the world.