Raiden Resources (ASX: RDN) shares are up 21% today. RDN shares have moved up on the announcement of their drilling results at Andover. Given how many other people are finding lithium in spodumene around Andover (Errawarra, Sabre etc) we’re fine with the idea that they’ve drilled into spodumene occurrences. Even that they contain lithium. We’re entirely willing to entertain the idea that it’s a viable lithium prospect too.
But there’s one little tell here for us. Something we regard as being so wrong that it casts doubt upon everything else. We agree, this is an extreme view. But it is still one we hold.
So, the announcement: “Raiden Resources Limited (ASX: RDN) (“Raiden” or “the Company”) is pleased to announce that initial assay results from its recently completed mapping and rock chip sampling program over its Andover South tenements, indicate high potential for significant and mineralised pegmatites.” Jolly good and all that. But then this “A significant percentage of results returned >0.1% Rb, with highest values of up to
0.36%Rb. The Company is still evaluating the distribution of the elevated Rb values in regard to the high grade lithium values and their relationships.” If you’re using Rb as an indicator of where the Li is then fine. But if you think the Rb is going to be a viable product then we’ve some news. Ah: “Rubidium is a high-value technology mineral mostly associated with pegmatite deposits. Rubidium Carbonate, the most widely used form of rubidium, is used in multiple applications, including in solar panels, fibre optic cables, GPS systems and night vision equipment, as well as sodium-ion batteries.”
They seem to think that Rb has a useful sales value. Sure, per gramme and so on it’s great. But global usage? The US uses perhaps 2 tonnes a year. No, two tonnes, not two hundred or two thousand.
Raiden Resources share price from Google Finance
It is true that no one’s mining pollucite any more, the traditional source of rubidium. It is also true that Li bearing spodumene (and others, like the zinnwaldite micas) contain Rb. The geology works, sure it does. But thinking that you’re going to gain a reasonable revenue stream from something that sells by the handful?
Add to this that everyone and their Granny is now out there mining spodumene. All of which is likely to have traces at least of Rb. But the market for Rb hasn’t increased in size - it’s still that couple of tonnes a year for the US. So supply, or at least potential supply, increases vastly and what does that do to any likely market price? Quite.
Twice over the years we’ve had to gently point this out to people enthused about the Rb conten of their minerals. There is a price for it, there is a market for it, but that market size is tiny. Thus so is the gross revenue possible also tiny. To the point where we simply regard anyone touting the potential rubidium values of their deposit as not being serious.
As we say, this is an extreme view. It’s entirely possible that Raiden has an interesting amount of lithium at Andover South. But that they talk of their rubidium values means we simply don’t believe in their seriousness. Rubidium’s a lovely little metal but claiming it as a serious revenue stream is not, to us, being serious. Sorry, but that’s just the way we think about this.
