Rodinia Lithium (CVE:RM)(OTCQX:RDNAF) Thursday closed its previously-announced potash stream financing with gross proceeds of $4.5 million.
Shares in the company were up 3.13 per cent to 16.5 cents as at 12:35 pm EDT.
this month, Rodinia announced its plans to boost the size of its potash
stream financing to 4.5 million subscription receipts at $1.00 each, on
a non-brokered private placement basis. The prior proposed financing
was for 3.0 million subscription receipts, for proceeds of $3.0 million.
subscription receipt is exchangeable into a unit consisting of one
non-voting potash stream preferred share and one half of a common share
Each whole warrant will allow the holder to
acquire one common share of the company at a price of 45 cents for a
period of 18 months following the closing date of the offering.
of the potash stream preferred shares will be entitled to receive a
cumulative, preferential cash dividend linked to the potash price and
the revenue generated by the company from its Salar de Diablillos
project, located in Salta Province, Argentina.
enables the company to continue development of its flagship Diablillos
lithium-potash deposit and sets us on our path to completion of a
feasibility study and what we believe will be the eventual production of
lithium and potassium products from the salar," Rodinia Lithium's president and CEO William Randall said.
added that the closing of the financing is a "significant corporate
achievement" in light of the current challenges in the capital markets.
on the pricing of the preferred shares, the implied valuation for our
potash stream is $20 million, which exceeds Rodinia's current market
capitalization and places no value on our significant lithium production
potential," said Randall.
"Our challenge moving forward is to
continue to advance this asset to production while correcting the
company's underlying valuation."
Rodinia's deal will avoid share
dilution with the company monetizing the by-product potash that is being
extracted from its lithium assets.
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 per
cent, 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 of
Closing of the offering will be subject to obtaining the required 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
America. The company is also exploring the commercialization of a
significant potash co-product that is expected to be recoverable through
the lithium harvesting process.
Rodinia's Salar de Diablillos lithium-brine project contains a
recoverable resource of 2.82 million tonnes lithium carbonate equivalent
and 11.27 million tonnes potassium chloride equivalent.
the company said it had successfully harvested sylvinite at its
Diablillos project. Sylvinite, a potash and sodium chloride, was
harvested during operation of its pilot engineering program being
conducted on site.
The company also holds 100 per cent mineral
rights to approximately 70,000 acres in Nevada's lithium-rich Clayton
Valley in Esmeralda County.
The Clayton Valley project is
located in the only known lithium-brine bearing salt lake in North
America, and looks to represent the only new source for domestic lithium