Largo Resources Receives Final Commitment from Commercial Banks for US$150 Million Financing for the Maracas Vanadium Project, Bahia, Brazil
Nov 09, 2011
TORONTO, ONTARIO -- (MARKET WIRE) -- 11/09/11 -- Largo Resources Ltd. (TSX VENTURE: LGO) ("Largo" or the "Company") is pleased to announce that Vanadio de Maracas Ltda., a 100% owned Brazilian subsidiary of Largo, has received binding commitments from a consortium of commercial banks led by Banco Itau BBA S.A. ("Itau BBA"), a subsidiary of Itau Unibanco Group and one of Brazil's leading banks, for guarantees of a Brazilian Development Bank ("BNDES") loan facility in the principal amount of up to US$150 million for the development of its Maracas Vanadium Project in Bahia State, Brazil.
Mark Brennan, President and Chief Executive Officer of Largo Resources, stated "We cannot understate our excitement at having received the commitment by the commercial banks to guarantee the BNDES facility." He added, "Following the issuance of the Enquadramento by the BNDES (see press release October 31, 2011) and the Installation License (see press release October 24, 2011) we are now in a position to make the Maracas project a reality."
The facility has an eight year term with a two year grace period for the repayment of principal. The interest rate with respect to the financing from BNDES, is yet to be determined but will be calculated based on a combination of the long term interest rate used by BNDES and the currency basket of the average cost of BNDES's long term own debt, such amounts to be determined by BNDES.
Largo's subsidiary, Vanadio de Maracas Ltda., shall receive up to US$150 million of funds from the BNDES on a pari passu 60:40 basis with equity contributions from Largo from the subscription receipt financing completed in April 2011. The commercial banks shall provide a project guarantee to the BNDES and take on the project risk.
The commitment by the commercial banks to guarantee the BNDES facility is the final requirement by the BNDES to commence the finalization of the financing. The next step will be to complete legal documentation and paperwork that are customary and standard in securing BNDES funding. The completion of the documentation is standard procedure and does not include technical diligence or project evaluation. A more comprehensive news release on the terms of the loan will be issued when final documents are received.
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