Thursday, 12 July 2012

Rodinia Lithium wraps up production well and drill program at Diablillos

Rodinia Lithium (CVE:RM)(OTCQX:RDNAF) provided Thursday a progress update on its Diablillos lithium-potash brine project in Salta, Argentina, saying it completed the prototype production well and drilling program.

The company is advancing the project toward feasibility stage, completing 10 additional conventional mud rotary drill holes that totaled 1,604 metres.

A prototype production well, 250 metres in depth, was also constructed.

Other drilling initiatives included seven pump testing and monitoring wells, and two fresh water monitoring wells.

The company said the latest round of drilling confirmed previously announced basin lithologies and provided "definitive basin/basement contacts" where previously estimated.

"Having mobilized an additional rig earlier in the year has enabled us to complete our work program on schedule," said Rodinia's president and CEO, William Randall.

"We now have all the required information for a resource update, which is the first important step towards completion of the Feasibility Study.

"We are extremely pleased with the progress our team has made and the results achieved to date."

Three of the drill holes designed for pump tests in the eastern portion of the Salar encountered "strong artesian conditions", the company noted, with flow rates of up to twenty-two litres per second.

Rodinia said that while this is positive for the long term prospects of the project, as it shows "high hydraulic conductivity and favourable lithology", it has limited the effectiveness of the pump tests.

The pressures exerted by the artesian conditions are such that down hole work was restricted.
Rodinia Lithium is focused on lithium exploration and development in North and South America.

The company'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 lithium explorer is also looking to commercialize a significant potash co-product that is expected to be recoverable through the lithium harvesting process.          

Indeed, Rodinia in late June closed its previously-announced potash stream financing with gross proceeds of $4.5 million.

The financing consisted of 4.5 million subscription receipts at $1.00 each, on a non-brokered private placement basis. Each subscription receipt is exchangeable into a unit consisting of one non-voting potash stream preferred share and one half of a common share purchase warrant.

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.
The company also holds 100 per cent mineral rights to around 70,000 acres in Nevada's lithium-rich Clayton Valley in Esmeralda County, and is currently in the process of assessing the size, quality and processing alternatives of this deposit.

The Clayton Valley project is located in the only known lithium-brine bearing salt lake in North America.

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