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.