Home / Mining Company News Releases (Unreviewed) / Rodinia Agrees to Sell Diablillos Project to Aberdeen International

Rodinia Agrees to Sell Diablillos Project to Aberdeen International

TORONTO, ONTARIO–(Marketwired – Oct. 8, 2015) – Rodinia Lithium Inc. (TSX VENTURE:RM) (“Rodinia” or the “Company”) has entered into a definitive agreement (the “Agreement“) with Aberdeen International Inc. (“Aberdeen“) to sell all of the shares of its wholly-owned subsidiary, Potasio y Litio de Argentina SA. (“PLASA“), to Aberdeen (the “Transaction“). PLASA holds a 100% interest in the Diablillos lithium-potash project (“Diablillos” or the “Project“) located in Argentina.

Under the terms of the Agreement, Rodinia will receive an aggregate cash payment of $5,000,000 as follows:

  • $250,000 shall be placed into an escrow account within five business days of the signing of the Agreement and such amount shall be released to Rodinia upon closing of the Transaction or, subject to certain conditions, in the event Aberdeen fails to close the Transaction;
  • $2,750,000 payable on the closing date of the Transaction; and
  • $2,000,000 to be paid by Aberdeen to Rodinia within six months of the closing date of the Transaction.

In addition, Rodinia will retain a 2% transferrable net smelter royalty (“NSR“) on all commercial sales from the Project, including the sale of potassium and lithium concentrates or products. Half of the NSR can be purchased by Aberdeen for $2,000,000 within 24 months of the closing date of the Transaction. The remaining 1% NSR does not have a predetermined purchase price nor is it subject to any rights in regards to its purchase or disposition by Aberdeen.

William Randall, President and CEO of Rodinia, commented “Rodinia’s board and management believe that the Agreement provides the best opportunity for the Company’s shareholders to realize value at this juncture. Rodinia has developed a very attractive project, but considering the generally challenging financial environment for junior mining companies compounded with the increasingly deteriorating financial and political climate in Argentina, we would expect the short and long-term financing needs of Rodinia to include, if available, potentially significant dilution to Rodinia’s current shareholders. We believe that this transaction provides the best opportunity for shareholders to preserve value and maintain exposure to the Project by means of a 2% NSR. Rodinia thanks all shareholders and stakeholders for their support and encouragement over the years.”

The Agreement includes a commitment by Rodinia not to solicit alternative transactions to the proposed Agreement and a break fee. A break fee of $250,000 plus the reasonable expenses of Aberdeen in connection with the Transaction has been set, subject to certain conditions, including the receipt and acceptance by Rodinia of a superior offer to the Transaction by a third party.

Certain officers of Rodinia are contractually entitled to severance payments that could be triggered by the transaction being considered a “change of control”, however each such officer has waived in full his severance payments.

Certain directors and officers of the Company and shareholders of the Company holding an aggregate of approximately 35% of the common shares of Rodinia and other securities of Rodinia have agreed to support the Transaction and each has entered into a support agreement with Aberdeen to vote their Rodinia securities in favour of the Transaction.

Based on the advice received from its financial and other advisors, including an oral fairness opinion provided by Salman Partners Inc., the board of directors of Rodinia, with the exception of David Stein who is an officer and director of Aberdeen and who has declared his interest in the Transaction and abstained from participating in the deliberations of the board and voting on the Transaction, determined that the Transaction is in the best interests of the Company and fair to Rodinia shareholders and resolved to approve the Agreement and to recommend that the Shareholders vote in favour of the Transaction.

The Agreement remains subject to certain customary closing conditions, including shareholder approval and the approval of the TSX Venture Exchange. The Company expects to hold its shareholders meeting in December 2015 and targets to close the Transaction prior to December 31, 2015. The deadline for the completion of the Transaction is January 30, 2016, subject to the parties agreeing upon an extension.

The Company is also pleased to announce that it has appointed Damian Lopez as the Corporate Secretary of the Company. Mr. Damian Lopez is a corporate securities lawyer who works as a legal consultant to various TSX and TSX Venture listed companies. Mr. Lopez previously worked as a securities lawyer at a large Toronto corporate law firm. He obtained his JD degree from Osgoode Hall and received a Bachelor of Commerce from the University of Toronto.

About Rodinia Lithium Inc.:

Rodinia Lithium Inc. is a Canadian mineral exploration and development company with a primary focus on Lithium exploration and development in Argentina. The Company is also actively exploring the commercialization of a significant Potash co-product that is expected to be recoverable through the lithium harvesting process.

Please visit the Company’s web site at www.rodinialithium.com or write us at [email protected].

FORWARD LOOKING STATEMENTS: This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, statements with respect to the Company’s exploration and development prospects, the expected benefits of the Transaction to the Company and its shareholders, the timing of the completion of the shareholders meeting and closing of the Transaction. When used in this document, the words “anticipate”, “believe”, “estimate”, “expect”, “intent”, “may”, “project”, “plan”, “should” “target” and similar expressions may identify forward-looking statements. Although Rodinia believes that its expectations reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statement. Important factors that could cause actual results to differ from these forward-looking statements include the potential that fluctuations in the marketplace for the sale of minerals, the inability to implement corporate strategies, the inherent uncertainties with respect to obtaining regulatory and shareholder approval in respect of the Transaction, the potential inherent risks and uncertainties associated with realizing the benefits expected from the Transaction, the inherent risks of Rodinia not successfully completing the Transaction and other risks disclosed in the Company’s filings made with Canadian Securities Regulators. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of Rodinia or any solicitation of proxies. The distribution of this communication may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Rodinia Lithium Inc.
William Randall
President and Chief Executive Officer
Tel: +1 (416) 309-2697

 

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