Australian firm Winsome Resources (WR1) has signed an agreement to acquire China-based Sinomine Rare Metals Resources’ stake in Power Metals, for C$2m in cash.

The deal follows the Canadian Government’s recent order to three Chinese companies, including Sinomine, to offload their investments in Canadian critical minerals.

Under the agreement, Winsome will also acquire Sinomine’s offtake rights for the lithium, caesium and tantalum from the Power Metals-owned Case Lake Project in Ontario, Canada.

Winsome will also obtain Sinomine’s rights and obligations signed between Sinomine and Power Metals in March 2022.

According to the offtake terms, Winsome will pay for all lithium, caesium and tantalum equating 95% of their market value to Power.

In the event of Sinomine not going for the purchase, Power Metals could offload those materials to a third party.

The latest deal was signed on 17 March 2022 and will be effective for three years.

Winsome said it has initiated strategic talks with Power on the development of the Case Lake project, which hosts high-grade lithium, caesium and tantalum deposits.

The project is located across the provincial border and in proximity to Winsome’s assets in Quebec.

Winsome Resources managing director Chris Evans said: “This is an exciting opportunity for Winsome to expand its interests in the Canadian critical minerals space and to enter the established mining province of Ontario, which neighbours Quebec.

“The Case Lake Project is located in relatively close proximity to a number of our assets, in particular Mazerac and Decelles, with similar geological characteristics and strong drill results showing high-grade caesium, lithium and tantalum mineralisation.

“The company’s immediate focus is to continue exploration and development of our flagship Cancet and Adina projects.”