Winsome secures A$25M for Adina-Renard lithium development

Australia’s Winsome Resources (ASX: WR1) has raised A$25 million to advance its Adina lithium project in Quebec as the explorer pivots to become a project developer in the medium term.

Winsome said Monday it had secured firm commitments for the financing at an average price of A$1 (91¢) per share.

By September, Winsome has earmarked the funds for completing environmental and social impacts, infrastructure upgrades, and metallurgical studies for the Adina and Renard projects. Winsome announced in April that it had offered to buy the Renard diamond mine in Quebec, aiming to repurpose the processing plant to treat lithium ore.

The capital raise received strong backing from existing shareholders and new investors, the company said. Winsome’s Sydney-quoted shares closed at 81¢ apiece on Monday, down 16% due to broader concerns affecting the lithium market. The stock has been down 53% over the past 12 months, and Winsome has a market capitalization of A$155 million ($113 million).

The financing comes as lithium prices tread water almost three times lower than a year ago. According to Trading Economics, lithium carbonate traded at 311,363 yuan (US$43,022) per tonne, compared to about 100,000 yuan (US$13,800) on June 17.

The Renard acquisition will open road and rail access year-round to the growing critical mineral and electric vehicle battery supply chain hub in nearby Bécancour and major ports on the St Lawrence Seaway. This move leverages Renard’s existing permits and Quebec site, accelerating and potentially de-risking Winsome’s lithium aspirations.

Over $900 million was invested in the asset, which has a capacity of 2.2 million tonnes per year.

Winsome will use a portion of the financing proceeds to finalize an updated Adina resource statement during the year’s second half.

Flow-through financing

Winsome used Canadian flow-through financing provisions for a portion of the deal before changes in Canadian tax laws take effect June 24, reducing the effectiveness of the exploration tax incentive.

“The flow-through financing provisions under Canadian tax law mean we are again able to raise funds at a significant premium to the current share price and therefore at a lower cost of capital,” managing director Chris Evans said in a statement.

The flow-through financing portion, worth A$13.2 million, was priced at A$1.275 per share, a 32% premium to Winsome’s A96.5¢ per share closing price on June 12. An additional A$11.8 million was raised through a share placement at A$85¢ per share.

Exploration focus

Winsome also plans to continue its discovery and growth drilling to expand the resource, which, as of May, entails 61.4 million indicated tonnes grading 1.14% lithium oxide, with the inferred resource at 16.4 million tonnes at 1.19% Li₂O.

The company continues to explore new zones of mineralization at Adina, including the Adina SW discovery. Exploration at other projects, Cancet, Tilly, Sirmac-Clappier, and the recently acquired Jackpot property, is ongoing.

Adina was first identified in 2016 and received a boost to its potential when Winsome discovered the Jamar outcrop (now the Main zone) in 2022. The company discovered the Footwall zone in 2023, adding the potential for multiple parallel zones below the main orebodies. The addition of the Jackpot property north of Adina last year increased the project area to 44 sq. km.

In December, Winsome released an initial 59 million tonne inferred lithium resource grading 1.12% lithium oxide for 1.6 million tonnes of lithium carbonate equivalent at Adina.