Winsome’s Chris Evans talks lithium prices, partners, M&A and that monster Adina resource

Winsome Resources (ASX:WR1) releases maiden 59Mt @1.12% resource at Adina in James Bay
Top 5 North American resource Comes just two years from listing on ASX
WR1 managing director Chris Evans expects lithium prices in improve next year
Wr1 continues to be ‘bombarded by requests to engage’ with strategic partners: Evans
Resource update due H1, project study H2

Quiet achiever Winsome Resources (ASX:WR1) has unveiled a long awaited maiden 59Mt @1.12% maiden resource for the Adina lithium project in James Bay.

Long overshadowed by overachieving neighbours Patriot (ASX:PMT) and Allkem (ASX:AKE), WR1 is now once of the top 5 hard rock lithium players in North America.

The resource surpasses Canaccord’s guess of 40Mt at 1.2% back in July.

It comes just two years since listing and a year since it discovered the main zone at Adina, one massive body of lithium which starts at surface.

With any luck this orebody all be mineable in one pit, the company says, even as the resource expands beyond its current 1.3km strike length.

Five rigs are turning ahead of a resource update is in the first half of next year, with 50km of infill and extensional drilling planned for 2024.

The scoping study/PEA study – the first proper look at the economics of building a project — are due out in the second half.

 

‘Bombarded by requests to engage’

With ~$69m in the bank at the end of October, WR1 managing director Chris Evans isn’t worried about short term weakness in the lithium market.

“Pricing will remain fairly weak in the first quarter and start to improve after that,” he said during an investor call.

“But to us, to some extent, the pricing doesn’t matter in the short term because we are fully financed to conduct all our activities next year.”

While demand WR1 sees from strategic players remains encouraging, but there’s no point bringing in an industry elephant for the sake of it, Evans says.

“We continue to be bombarded by requests to engage,” Evans says.

“We have had a significant amount of interest from various strategics all along the battery materials supply chain, from OEMs to lithium miners, to traders, to battery makers.

“They have all been of an exploratory nature thus far, and we have taken the approach that we are not ready to engage yet.

“We have upgrades to the resource, we have studies coming up in the second half of next year – through all of this we are organically building value in Winsome.”

There there will be a point, perhaps next year, where it is going to be worth investigating whether bringing in a strategic partner, Evans says.

“External validation, funding, or the achievement of strategic aims – such as having our product remain in the North American battery materials supply chain — could be enough to bring a strategic on at some point,” he says.

Winsome Resources base camp in Quebec. Source WR1

Market disruptors won’t disrupt us, Evans says

Evan was asked if market disruptors like new tech, regulatory changes, competitive entrants, and environmental/social factors could hobble WR1’s ambitions over the next year or two.

“All of those things could influence the industry in general. For us, I feel our path is well set,” he says.

“I don’t think technological advancements will change the industry a great deal between now and the time we plan to come into production.

“We reason we love Canada and Quebec is that it is a very stable regulatory environment.

“Broadly speaking, we are so well financed for our drilling and studies next year, I can’t see too many factors that will disrupt us.”

Canada M&A?

Evans says the M&A blitz which hit the WA hard rock scene will at some point turn to Canada, and Quebec in particular, where there a several very significant lithium resources.

“The M&A so far in WA has been perhaps for nationalistic reasons, and because those conducting the M&A already have established operations in WA,” he says.

“Canada is a slightly different story, but in the meantime, we are de-risking our project day by day.

“I think eventually M&A activity will come to Canada, [and] we intend to be well prepared by then.”

Quebec. Source: WR1.

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