Largo Resources extends deadline to purchase Northern Dancer

Largo Resources (CVE:LGO) has managed to again extend the deadline for its purchase of the remaining 30% interest in its Northern Dancer tungsten-molybdenum deposit in the Yukon.

The company, which already owns a 70% stake in the property, now has until May 15, 2011 to pay Strategic Metals US$5 million for the final 30% holding.

Largo said it plans to fund the payment through the exercise of warrants and options that expire in early May.

The Toronto-based mineral explorer was originally supposed to acquire the remaining stake in Northern Dancer in March 2010, within 12 months from the date of the initial option agreement, but this deadline was extended to March 11, 2011.

"Finalizing the acquisition of the remaining 30% option on the Northern Dancer property is an important next step in Largo's goals for the project," said president and CEO Mark Brennan.

"Following our recent announcement of a positive Preliminary Economic Assessment on the project, we look forward to completing the transaction and furthering the development of this world-class tungsten and molybdenum asset."

Northern Dancer is one of the world's largest known tungsten-molybdenum porphyry systems, located in south central Yukon. Based on a project life of 49 years and initial pre-production capital costs of US$645 million, the preliminary report estimated the property has a 20% pre-tax internal rate of return, and a net present value of US$918 million, at an 8% discount rate.

In the core of the deposit, there is a higher-grade molybdenum zone, and partially overlapping this area is a much more extensive tungsten zone. Tungsten is a robust steel gray metal used widely in electrical applications, while molydenum is a silvery metal used in stainless steels, cast irons and super alloys.

The deposit has estimated measured mineral resources of 30.8 million tonnes, grading 0.114% WO3 and 0.030% Mo, as well as indicated resources of 192.6 million tonnes grading 0.100% WO3 and 0.029% Mo. Inferred mineral resources were estimated to be 201.2 million tonnes grading 0.089% WO3 and 0.024% Mo.

Last Friday, Largo said it signed a letter of intent to complete a private placement financing for gross proceeds of at least C$110 million, which will be used to fund the construction of the company's Maracas vanadium mine in Brazil.

The new placement, which will consist of units and subscription receipts, will be lead by three investors, including Eton Park Capital Management, Arias Resource Capital and Mackenzie Investments, two of which are Largo's largest existing backers. Each subscription receipt will convert into one unit dependent on if certain goals are achieved, Largo said.