Highgrade interviews William Randall from Rodinia Lithium (TSXV:RM)

President & CEO William Randall, "We are developing the potash potential of our current properties".

A tale of two projects. Toronto’s Rodinia Lithium (TSXV:RM), like its peers Talison and Lithium One, is developing lithium projects in two radically diverse geographical areas; Nevada and Argentina. But unlike its counterparts, Rodinia is focused exclusively on lithium brine production. A comparison of Rodinia's properties reminds investors that geopolitical concerns are never far from the mining world.

Earlier this month, Rodinia announced results from an independent brine resource estimate of its Diablillios Project in the province of Salta in Argentina. As conducted by AMEC Internacional Ingenieria y Construccion, the report is consistent with the standards set out in Canadian Securities Administrators’ National Instrument 43-101 but does not constitute a NI-43-101 report. Nonetheless, the report identifies 4,959,000 tonnes of lithium carbonate equivalent, 19,837,000 tonnes of potassium chloride and 6,194,000 tonnes of B203.

Talking about the results William Randall, Rodinia’s President and CEO said, “This resource represents one of the largest estimated brine resources in the world. In addition to its size, the brine geochemistry is favourable with low magnesium-to-lithium and sulphate-to-lithium ratios.”

Lithium brine refers to lithium that is not mined, but rather, produced from brine, or salt water. To recover lithium this way salt rich brines are pumped from just beneath the surface of the desert and diverted into a series of large, shallow ponds. Areas of Nevada, Chile and Argentina are particularly rich in lithium brine.

At first blush the timing of Rodinia’s resource estimate was not ideal. A few days after the report the government of neighbouring Jujuy province in Argentina announced a decree making lithium of strategic importance to their region making investors nervous that legislation around lithium in places like Argentina might become more widespread and protectionist. Then on March 11th the Japanese earthquake and subsequent tsunami hit resulting in general and widespread market instability. Shares of Rodinia feel from $0.57 to $.385 in a matter of days.

Rodinia was quick to point out that its two main projects were unaffected by the decree. President and CEO William Randall calmed fears by pointing out, “Mining legislation and government activity within the mining sector varies dramatically from province to province in Argentina, and the evolution of legislation in one province does not directly impact neighbouring provinces”.

Clearly, the position of the Jujuy province in Argentina has no bearing on the company’s Clayton Valley Project in Nevada which the company believes can offer some strategic benefits down the road. The Highgrade Review sat down with William Randall to find out more about Rodinia Lithium, its strategic partnership with China’s Ningbo Shanshan and the company’s future plans.

Rodinia Lithium has properties in both the United States and Argentina – could you tell us about the projects and why the company is focused on two geographically diverse areas?

Rodinia has a project in Salta Province, Argentina, covering the entire Salar de Diablillos. This property hosts a recently announce resource of almost 5 million tonnes of lithium carbonate and 20 million tonnes of potash. Coupled with this very large resource are high grades of both lithium and potassium as well as a brine geochemistry that is amenable to low cost, conventional processing. This project has lots of upside and is well positioned to become the newest lithium carbonate and potash producer. Our second project is in Nevada, United States, and covers 70,000 acres of the only lithium brine producing salt flat in North America. The brines have been harvested since the 1960’s, so it is an asset with proven potential. These two flagship projects have many common elements that we consider important: stable, friendly mining jurisdictions; brine-based lithium and potash source (lower cost than hard rock lithium or conventional underground potash), excellent geochemistry, and very significant land holdings that allow us to control the salt lake. Argentina gives us a significant potential producer in the heart of the South American lithium triangle. To that, the Nevada asset provides geographical diversity and access to a very large domestic market that is supported by investments from the Obama government as well as auto and battery OEMs.

Argentina is a notable mining country but it is also notorious for its archaic bureaucracy – has Rodinia faced any of these issues in Argentina?

Argentine mining law is determined provincially. It is therefore very important to make sure you choose projects that are in mining friendly provinces such as San Juan and Salta. Salta, where our Diablillos asset is located, has a very long and stable mining history, evidenced by the presence of numerous international mining companies including Rio Tinto Minerals. As such, Rodinia has not faced any issues so far and does not expect to in the future.

There has been a lot of talk lately from the Obama administration about energy independence – as supplier of lithium that is based in the U.S. is anything materializing on the front lines or should we chalk this up as more government rhetoric?

This is an avenue that the Obama administration is actively pursuing. In fact, last year the government issued a $30M grant to expand the Silver Peak lithium carbonate production facility, located in Clayton Valley, in a push to secure a domestic supply of lithium. I think we will find the US to be increasing its activity in the sector in a push to gain independence from the oil producing countries.

You recently closed an $11.5 million financing, where do you plan on spending that money and what major milestones are you hoping to accomplish?

We are now well financed to reach major milestones on both properties. In Diablillos we are moving towards a feasibility study. Our work program will incorporate further exploration drilling, an updated and upgraded resource, metallurgical report to demonstrate the brine’s amenability to conventional processing, pump tests to determine the production potential of the salar and seismic profiles. A feasibility study will allow us to prove the excellent production potential of the deposit. In Clayton Valley we will move towards the resource stage by completing an exploration program on the southern claims. We hope to release a resource estimate in the second half of 2011. This area hosts the only brine resource in North America.

I noticed on your website you have an “Other Projects” section that says “Coming Soon”. Is the company looking at other non-lithium projects or will your focus remain Lithium?

We are not looking at non-lithium projects. We are developing the potash potential of our current properties and will devote this section of the website to this. We have 20 million tonnes of potash contained in Diablillos brine. As a co-product during lithium carbonate production, this could be introduced to the market at the very low end of the cost curve. We think the potash company offers upside for the company over other lithium deposits that do not have this advantage, primarily the hard rock facilities.

Can you please discuss the significance of you recent announcement with strategic investor Shanshan?

Shanshan is the largest lithium battery components manufacturer in China. What that means is that they produce the anode and cathode material for the Li batteries. They are a major consumer of lithium carbonate and are trying to secure a steady supply of the stuff for future growth. They estimate huge growth in the sector and have a very aggressive agenda to increase their market participation. The private placement we completed with Shanshan late last year was an indication of their interest in our properties. We are now working on developing a more involved partenership with them and the Institute of Salt Lakes (ISL) whom they sponsor. ISL is a university with over 40 years experience in the brine processing field and will be an integral part of our project going forward.

What sets Rodinia apart from its competition?

Rodinia is well positioned to take advantage of the growth in lithium carbonate and potash demand. With our brine assets, containing what we believe are world class resources, we can project operating costs in the lowest percentile distributed in two mining friendly jurisdictions. We are fully funded to meet our next milestones and have the backing of China’s largest lithium carbonate consumer. We think the company has a bright future!