Thursday, 14 June 2012

Rodinia Lithium to increase size of potash stream financing to $4.5 mln

Rodinia Lithium (CVE:RM)(OTCQX:RDNAF) said Thursday that it plans to boost the size of its previously announced potash stream financing to $4.5 million.

The issue size will be increased to 4.5 million subscription receipts at  a price of $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.
Each subscription receipt will be exchangeable into a unit consisting of one non-voting potash stream preferred share and one half of a common share purchase warrant.

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.

Holders 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.

Rodinia's deal will avoid share dilution with the company monetizing the by-product potash that is being extracted from its lithium assets.

The capital raised will go toward building a pilot plant and completing a feasibility study for the company's flagship Salar de Diablillos project.

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 9 per cent, plus a potash price adjustment, payable annually on the last day of January following the relevant completed fiscal year.

Thereafter, 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 potash sold.                       

Closing of the offering will be subject to obtaining the required TSX Venture Exchange approval.

Rodinia Lithium 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.

In May, 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 carbonate supply.

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