Winsome intends to repurpose the existing infrastructure for lithium processing to handle ore from its nearby Adina project. The company now has until the end of the year to decide whether it will pay C$52 million to C$54 million to exercise the option. Initially, Winsome paid C$4 million for the option.
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“Extending the option provides us additional optionality to consider the various commercial and corporate opportunities available as we advance project studies on our significant lithium project in North America,” said Winsome’s general manager Carl Caumartin.
The potential acquisition of Renard comes as the diamond market struggles and lithium prices remain low. This move is significant given Quebec's prominence in lithium exploration and mining, being home to one of Canada’s only two active lithium mines.
Early evaluations suggest that converting the plant might be more cost-effective than constructing a new facility, potentially reducing capital expenditures and accelerating project timelines. The extension also ensures that Stornoway Diamonds will continue to cover the Renard site’s care and maintenance costs until Winsome makes a final decision.
Stornoway temporarily suspended operations at Renard last October due to mounting uncertainty in diamond prices and a sharp decline in the global market value of diamonds. These challenges, coupled with the suspension of rough diamond imports to India and current global geopolitical tensions, have significantly impacted the company’s financial outlook.
New Study Signposts
Winsome is conducting due diligence on both new and repurposed project development. The ‘greenfield’ study focuses on developing a new lithium project at Adina, while the ‘brownfield’ study assesses the feasibility of using Renard’s setup for lithium extraction. Both studies are expected to conclude by the third quarter of this year.
Recent drilling at Adina increased the resource estimate by 33% over the 2023 estimate, with indicated resources now at 61.4 million tonnes grading 1.14% lithium oxide (Li2O), and inferred resources at 16.4 million tonnes grading 1.19% Li2O. The Main zone holds 8.7 indicated tonnes and 37.1 inferred tonnes at 1.23% Li2O. Exploration continues with drilling at the Adina SW and Footwall zones.
If Winsome acquires the Renard project, it would gain year-round road and rail access to key infrastructure at Bécancour and major ports on the St. Lawrence Seaway, enhancing its position in the North American electric vehicle (EV) supply chain. The Renard site, with over C$900 million invested in development, has a capacity of 2.2 million tonnes per year.
“Winsome Resources is firmly committed to developing the Adina lithium project in a cost-effective and efficient manner as we continue to develop a pathway to production aligned with our vision to integrate into the North American EV supply chain,” managing director Chris Evans said.
The company is also exploring other mineralization zones and projects in Quebec, which is emerging as a key player in lithium production thanks to its rich deposits and supportive regulatory environment.
Despite these positive developments, Winsome’s stock fell 6.8% to A$0.55 per share by market close, giving it a market cap of A$119 million.
As Winsome Resources moves forward with its evaluation and project studies, the extended option for the Renard plant could prove pivotal in shaping the company’s future in the lithium sector. With promising evaluations and strategic planning underway, all eyes will be on Winsome as it navigates its path towards integrating into the North American EV supply chain and advancing its lithium projects.
