Largo closes financings for $23.4-million (U.S.)

Executive Summary

• Largo Inc. has closed a registered direct offering and concurrent private placement, raising a total of approximately $23.4 million (U.S.) to address serious financial difficulties and liquidity constraints.
• The transaction includes the issuance of common shares and warrants to public investors and an affiliate (Arias Resource Capital Fund III), with proceeds designated for working capital, debt repayment, and mine operations.
• The company secured a financial hardship exemption from the Toronto Stock Exchange (TSX) and relied on specific exemptions from minority security holder approval requirements due to the related-party nature of the financing.

Key Details

• Registered Direct Offering:
  • Closed previously announced offering of 14,262,309 common shares.
  • Purchase price: $1.22 (U.S.) per common share.
  • Aggregate gross proceeds: $17.4 million (U.S.).
• Concurrent Private Placement (Arias Resource Capital Fund III L.P. - "ARC Fund III"):
  • ARC Fund III, an affiliate of the company's largest shareholder, provided $6 million (U.S.) in financing.
  • Acquired 4,918,033 common shares and 4,918,033 unregistered warrants.
  • Terms: Same as the registered direct offering ($1.22 per share/warrant, immediately exercisable, 5-year expiration).
  • Structure: A portion of the ARC commitment was advanced via a $5 million (U.S.) secured convertible bridge loan.
  • Conversion: The ARC bridge loan automatically converted upon closing into units consisting of unregistered common shares and warrants on the same terms as the offering.
• Use of Proceeds:
  • Equity contribution to principal operating subsidiary, Largo Vanadio de Maracas S.A. (LVMSA).
  • Sustain working capital until 2026.
  • Facilitate payment to LVMSA's Brazilian lenders.
  • Payments to mining contractor at the Maracas Menchen mine and key suppliers (noted as critical due to negative impact on production rates from liquidity constraints).
• Regulatory and Legal Context:
  • TSX granted a financial hardship exemption regarding pricing, terms, size, and securityholder approval requirements.
  • Relied on sections 5.5(g) and 5.7(1)(e) of Multilateral Instrument 61-101 to be exempt from minority security holder approval and formal valuation for the ARC bridge loan (a related party transaction).
  • Offering made pursuant to an effective shelf registration statement on Form F-3 (file No. 333-290163), declared effective by the SEC on Sept. 19, 2025.
• Placement Agent:
  • H.C. Wainwright & Co. acted as sole placement agent for both the registered direct offering and the ARC offering.

Notable Quotes

• No direct quotes from the CEO/President were included in the provided text.