Rodinia Lithium Inc. (TSXV:RM,OTCQX:RDNAF) has closed its potash stream financing and has issued 4,500,000 units at a price of $1.00 per unit for aggregate gross proceeds of $4,500,000.
As quoted in the press release:
Each unit (a “Unit”) consists of one Cumulative Rate Reset Non-Voting Potash Stream Preferred Share (a “Potash Stream Preferred Share” or “Preferred Share”) and one-half (1/2) of a common share purchase warrant (“Warrant”). Each whole Warrant will entitle the holder thereof 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 Offering. The Units and the underlying common shares remain subject to statutory resale restrictions which expire on October 27, 2012. At the Company’s annual and special meeting of shareholders held on June 18, 2012, shareholders approved, among other things, the creation and issuance of the Preferred Shares.
Rodinia President & CEO William Randall said:
“This financing 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. Additionally, the closing of this financing is a significant corporate achievement given the current challenges in the capital markets. We have found a creative way to raise capital with very minimal dilution for common shareholders. Based 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. Our challenge moving forward is to continue to advance this asset to production while correcting the Company’s underlying valuation.”