Chris Evans-led Winsome Resources has announced it will raise $25 million in order to accelerate development at its Adina lithium project in the Canadian province of Quebec.
Chris Evans-led Winsome Resources has announced it will raise $25 million in order to accelerate development at its Adina lithium project in the Canadian province of Quebec.
The capital raise follows on from news on May 8 that Adina’s mineral resource estimate had increased by 33 per cent to 77.9 million tonnes at a grade of 1.15 per cent of lithium oxide.
Winsome said along with $13.16 million being raised through a Canadian flow through placement, it would also generate an additional $11.8 million courtesy of an institutional share placement.
Due to the lithium explorer and developer not offering the FTS placement to Quebec residents, it is entitled to claim 38.5 per cent of all eligible expenditure from the Quebec government as a tax refund.
Under this system, investors are eligible for tax incentives, when expenditure qualifies under flow through critical mining parametres under Canada’s Income Tax Act.
The FTS placement issue price is $1.27 per share, which represents a 32 per cent premium on Winsome’s last closing price on June 12 prior to entering its trading halt.
Under the institutional share placement, Winsome told the market it would issue 13.92 million shares at an offer price of 85 cents per share, which represents an 11.9 per cent discount to its final closing price of 96.5 cents.
“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,” Mr Evans said.
“The additional funds put Winsome in an enviable position, with one of the largest and growing lithium deposits in North America, an exclusive option to acquire the billion-dollar Renard operation and associated infrastructure and a clearly defined pathway to production.”
Winsome’s FTS placement will be facilitated by PearTree Securities, while the end buyer block trade will be overseen by Canaccord Genuity, which was appointed global co-ordinator.
It also worked as joint lead manager and bookrunner with Euroz Hartleys.
Proceeds from both placements will be put towards a raft of drilling activities, along with work studies.
On April 3, the lithium explorer confirmed it had signed a binding, exclusive option agreement with Canada-based Stornoway Diamonds, in regards to acquiring its Renard diamond mine, located 60km south of Adina.
During its March 2024 quarterly report, Winsome said it was also presently undergoing two concurrent project studies.
The first study adopts a greenfield model in which a lithium processing facility would be constructed at Adina, while the second – under a brownfield model – would result in Renard’s existing plant being reconfigured for lithium concentrate production.
Winsome last traded at 82 cents, down 15 per cent, as of 1.48pm WST.
