Reedy Lagoon enters completion phase of $3.5 million entitlement offer

Published at Nov 27, 2017, in Small Caps

Reedy Lagoon Corp. (ASX:RLC), a junior lithium explorer based in Australia, has commenced an Entitlement offer to raise $3.5 million from existing shareholders. The purpose of the capital raising was to facilitate upcoming exploration activities at RLC’s string of lithium brine projects in Nevada.

Only shareholders with a registered address in Australia or New Zealand are eligible and RLC has opened the offer to investors as of today.

RLC approved its decision to move into Nevada at an EGM in mid-November, where shareholders approved the issue of $2 million worth of RLC shares to the vendors of Nevada Lithium Pty Ltd. The offer is fully underwritten by Patersons Securities Limited with new shares expected to commence normal trading on the ASX as of 18th December 2017.

A maximum of 140,150,134 new shares (44.4% of post issue share capital) will be issued as fully paid under the Offer, and RLC will have 316,215,302 ordinary shares on issue after the offer is completed.

RLC Strategy in Nevada

RLC’s admitted strategy is to make headway in lithium mining, by focusing on cheaper productions costs.

Lithium brines can be processed at around half the cost burden endured by the hard rock miners because it doesn’t need to be mined, crushed or roasted.

Given the lithium industry as it stands, deriving lithium compounds from brine sources tends to be cheaper than from mineral sources such as spodumene. However, they tend to take a little longer to bring to market but with the cushion of having longer-lasting mine life. If RLC can define a lithium Resource in Nevada, it will likely mean a commercially-viable mining operation will eventually be put together by RLC. Combined, RLC’s lithium projects have an exploration Target of between 750,000 tonnes and 1,000,000 tonnes of LCE at a grade of between 90mg/L and 120mg/L.

Although it is still early stages for RLC, so investors should seek professional financial advice if considering this stock for their portfolio.

In a speech given to shareholders at its EGM, RLC Managing Director Geof Fethers said, “Our focus is on exploiting potential new processing technologies that may enable lithium extraction and refining from brines. Such technologies may render obsolete the current evaporation ponds used by all existing lithium from brine producers and enable production of battery grade lithium products. These new brine processing technologies seem more suited to processing brines with low levels of deleterious substances such as magnesium, calcium and sulfates which is why Reedy Lagoon has selected brines in Nevada”.

At the time of writing, RLC shares were trading at $0.037, and valued at $11.7 million by market capitalisation.

reedy lagoon share price

The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

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