Winsome Resources' Adina Lithium Project: Viability Confirmed by Scoping Study
WINSOME RESOURCES LIMITED (WR1) Share Update September 2024 Monday 16th
Winsome Resources Confirms Viability of Adina Lithium Project
Winsome Resources (ASX:WR1) has released a scoping study confirming the viability of its Adina Lithium Project in Québec, Canada, as one of the most capital-efficient new lithium projects in North America.
Instant Summary:
- 21-year Life of Mine (LOM) with a 17-year Active Production Period (APP).
- Forecast average annual production of 280,000 tonnes of Spodumene Concentrate.
- Low Start-Up Capital Cost due to repurposing the existing Renard facility.
- High-grade lithium mineralization and favorable geo-metallurgy.
- Competitive operating cost estimates and strong project economics.
- Potential strategic partnerships in the Electric Vehicle (EV) battery materials supply chain.
Project Overview
The scoping study for Winsome Resources' Adina Lithium Project has confirmed its viability and quality, positioning it as one of the most capital-efficient new lithium projects in North America. The project boasts one of the largest Measured and Indicated Mineral Resources in North America, underpinning a 21-year Life of Mine (LOM) with a 17-year Active Production Period (APP).
The study forecasts an average annual production of over 280,000 tonnes of Spodumene Concentrate (5.5% basis) during the APP. The low net Start-Up Capital Cost reflects the intrinsic value in the exclusive option over the Renard Operation, providing significant capital savings compared to a greenfield project.
Technical and Economic Highlights
High-grade lithium mineralization and favorable geo-metallurgy enable Winsome to produce high-quality, coarse concentrate using simple Dense Media Separation (DMS) processing. The competitive operating cost estimates due to near-surface high-grade mineralization, low strip open-pit mining, and simple DMS flowsheet result in strong project economics.
The scoping study results include a Net Present Value (NPV) at an 8% discount rate of approximately US$740 million, a low Start-Up Capital Cost of US$260 million, and competitive C1 Operating Costs estimated to average US$598 per tonne of concentrate. The estimated payback period is 1.8 years, with an Internal Rate of Return (IRR) of 43% on a post-tax, pre-finance basis.
Strategic Partnerships and Future Steps
The completion of the scoping study enables Winsome to advance discussions with potential strategic partners, including those in the EV battery materials supply chain. Winsome's Managing Director Chris Evans emphasized the robust basis provided by the study to advance the development of Adina, highlighting the commercial advantage of repurposing the existing Renard facility for a modest Start-Up Capital Cost.
Winsome has a clear pathway to production, supported by well-planned strategic initiatives like the exclusive option to acquire Renard. The company aims to provide long-term returns to shareholders, stakeholders, and the First Nations in the Eeyou Istchee James Bay region and the Province of Québec.
The positive scoping study for the Adina Lithium Project is expected to have a favorable impact on Winsome Resources' stock. The project's strong economics, low start-up costs, and potential for strategic partnerships in the EV battery supply chain position Winsome for long-term growth. Investors are likely to respond positively to the confirmed viability and quality of the project.
Investor Reaction:
Analysts are expected to react positively to the scoping study results, noting the project's strong financial metrics and strategic advantages. The potential for strategic partnerships in the EV battery supply chain is particularly noteworthy, given the growing demand for lithium in the electric vehicle market.
Conclusion:
Investors should monitor Winsome Resources' progress as it advances discussions with potential strategic partners and moves towards production. The Adina Lithium Project's confirmed viability and strong project economics make it a promising investment opportunity in the growing lithium market.