Rodinia Lithium (CVE:RM)(OTCQX:RDNAF) said late Monday that it will issue 3 million subscription receipts to an investor at $1.00 each, in a $3 million non-brokered private placement financing linked to potash price and future potash by-product sales.
The capital raised will go towards building a pilot plant
and completing a feasibility study for the company's flagship Salar de
Diablillos project located in Salta Province, Argentina.
unique structure of this offering recognizes the value inherent in our
potash by-product, while at the same time providing us an opportunity to
raise capital in a manner that is non-dilutive to the common
shareholders of the company," Rodinia's president and CEO Will Randall
"While this financing places a current value on the potash
by-product of C$20 million, Rodinia’s primary source of income in the
event of production remains the sale of high purity lithium carbonate
Each of the subscription receipts will be
exchangeable into a unit consisting of one non-voting potash stream
preferred share and one-half of a common share purchase warrant.
of potash stream preferred shares will be entitled to receive a
cumulative, preferential cash dividend linked to the price of potash and
to the revenue generated by the company from its potash by-product
sales from Salar de Diablillos.
Each whole warrant will entitle
the holder to acquire one common share of the company at a price of
$0.45 for a period of 18 months following the closing date of the
Salar de Diablillos contains a recoverable resource of
2.82 million tonnes lithium carbonate equivalent and 11.27 million
tonnes potassium chloride equivalent.
The project contains a
recoverable inferred resource of 952 million cubic metres grading 556
milligrams per litre lithium and 6,206 milligrams per litre potassium.
2012, Rodinia will focus on continuing to develop the Diablillos
project by completing additional drilling and advancing it through to
An updated mineral resource estimate is due
for release in the second or third quarter, the company said recently,
as its lithium project advances.
Initially, each potash stream
preferred share will provide for an annual cumulative preferential cash
dividend at a floating per share rate over the issue price of nine
percent plus a potash price adjustment, payable annually on the last day
of January following the relevant completed fiscal year.
the dividend rate will be reset so that holders will be entitled to
receive quarterly dividends in an amount equal to the total amount of
net potash revenue generated from the project for that quarter divided
by 20 million - the maximum number of preferred shares that will be
authorized in the capital of the company.
Net potash revenue will
be calculated based on the quantity of potash sold and the potash sales
price realized, less a potash production cost of $185.00 per tonne.
Closing of this offering is subject to TSX Venture Exchange approval.
is a Canadian mineral exploration and development company with a
primary focus on lithium exploration and development in North and South