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TORONTO - Largo Inc. (TSX:LGO) (NASDAQ:LGO), currently valued at $160.82 million in market capitalization, announced Wednesday it has secured binding commitments for a US$23.4 million offering to address its working capital deficiency and meet equity contribution requirements for a debt rollover agreement with its senior lenders. According to InvestingPro data, the company has been quickly burning through cash, with a concerning current ratio of 0.51.
The offering consists of a registered direct offering in the United States and a concurrent private placement, comprising common shares and warrants at a combined price of US$1.22 per unit. Each warrant will be exercisable immediately at US$1.22 per share for five years. Despite recent financial challenges, InvestingPro analysis shows the stock has demonstrated strong momentum with a 68% return over the past six months, though short-term obligations currently exceed liquid assets.
The company’s largest shareholder, Arias Resource Capital Fund III L.P., has committed to acquire 4.9 million common shares and warrants through the private placement, including US$5 million already advanced through a secured convertible bridge loan.
Largo stated the financing is critical to sustain working capital, make payments to Brazilian lenders, and address payments to the mining contractor at its Maracás Menchen Mine, where liquidity constraints have begun to negatively impact production rates.
The company has faced significant financial pressure due to depressed vanadium prices, which have declined sharply in 2025 due to oversupply from China and Russia coupled with weaker-than-expected demand. Additionally, U.S. tariffs on imports from Brazil increased from 10% to 50% in August 2025, impacting Largo’s high-purity vanadium sales to U.S. customers. The company’s financial strain is evident in its revenue decline of 31.7% over the last twelve months. For deeper insights into Largo’s financial health and 12 additional ProTips, visit InvestingPro, where you can access comprehensive Pro Research Reports covering 1,400+ US equities.
The offering is expected to close around October 22, 2025, subject to Toronto Stock Exchange approval. Largo has applied for a financial hardship exemption from TSX shareholder approval requirements, which could result in a remedial delisting review.
H.C. Wainwright & Co. is serving as placement agent for the transaction, receiving a 7% cash fee on the aggregate proceeds, except for the Arias commitment which carries a 2% fee.
This article is based on a press release statement from Largo Inc.
In other recent news, Largo Inc. has announced several financial and operational updates. The company secured approximately $23.4 million through a combination of offerings to address its financial challenges. This financing includes issuing 14.26 million common shares at $1.22 per share and unregistered warrants in a concurrent private placement. Additionally, Largo reached an agreement with five Brazilian banks to defer $84.2 million in principal debt repayments for its subsidiary, with conditions for further extensions. On the production front, Largo reported improved vanadium pentoxide production in the second quarter of 2025, with a 74% increase from the first quarter, despite being below the same period last year. The company also faced operational challenges due to tariffs and liquidity issues, although production levels showed improvement. Meanwhile, H.C. Wainwright reiterated a Buy rating on Largo’s stock, maintaining a price target of $3.70, following the company’s second-quarter production results. These developments indicate ongoing efforts by Largo to stabilize its financial position and enhance production capabilities.
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