HIGHLIGHTS
- Reduction of initial payment upon exercise of the option from C$15 million to C$1 million.
- The balance of the Renard consideration payment delayed until 2026 and 2027.
- Renard Option restructure preserves shareholder value by deferring material payments by 12 months and extending the payment consideration period to 30 months from exercise.
- Option to Acquire the Renard Project extended to 28 February 2025 at a cost of $2 million.
- Extension gives Winsome scope to explore opportunities to bring in a strategic partner in 2025 and assess various commercial and corporate opportunities to reduce the costs associated with the potential acquisition.
Lithium explorer and developer Winsome Resources (ASX: WR1; Winsome or the Company) announces it has agreed an amended consideration structure with Stornoway Diamonds (Canada) Inc. (Stornoway) and 11272420 Canada Inc. (together the Vendors) whereby Winsome elects to exercise its exclusive option over the Renard Project (Option).
While the total consideration remains unchanged, the amended consideration structure defers payments and extends the period over which Winsome must pay the total consideration to 30 months from exercise (previously 24 months). The amended consideration structure preserves current Winsome shareholder value, and further details of the amendment are set out in the table below.
Other than as set out in the above table, all other material terms and conditions of the Call Option Agreement, as detailed in the announcement of 3 April 2024, are unchanged.
Due Diligence Activities
Additionally, the Company refers to its announcement on 3 April 2024 regarding the exclusive Option Agreement between Winsome, Stornoway Diamonds (Canada) Inc. (Stornoway) and 11272420 Canada Inc (Option) in relation to the potential acquisition (at Winsome’s election) of the Renard diamond mine, processing facility and associated infrastructure (Renard or Renard Project) or all the issued capital of Stornoway.
Since the Option was signed, Winsome has substantively completed its due diligence on Stornoway and Renard, and its assessment of the potential technical, economic, environmental, and social feasibility of repurposing the Renard Project into a lithium operation. The Company is currently in discussions with Stornoway in relation to the final form of the transaction agreement.
Option Extension
Winsome is exploring the opportunity to bring in a partner interested in providing capital for the project in return for a long-term strategic investment. Therefore, Winsome has elected to pre-emptively extend the Option period by 2 months from 31 December 2024 to 28 February 2025, by paying a further C$2 million in cash in accordance with the Option.
Regular site visits have been and continue to be scheduled at Adina and Renard as Winsome assesses various commercial and corporate opportunities to potentially defray costs associated with the acquisition and development of Renard.
Shareholder approval to issue consideration shares under the Call Option Agreement
At the Company’s Annual General Meeting on 28 November 2024 shareholders approved an issue of up to 30,000,000 fully paid ordinary shares in the Company for the purposes of Listing Rule 7.1. The approval related to the consideration payable upon Closing under the original Call Option Agreement. Following the amendments to the consideration payment schedule, the Company will no longer issue those shares to Stornoway Diamonds (Canada) Inc. and 11272420 Canada Inc. as contemplated by Resolution 19 of the Notice of Meeting dated 29 October 2024.
To learn more about the restructuring, see the ASX dated 4 December 2024, https://wcsecure.weblink.com.au/pdf/WR1/02890223.pdf