Winsome Resources has signed a binding agreement to secure an option to acquire the Renard diamond mine in Quebec from Stornoway Diamonds (Canada) and 11272420 Canada.

The company opines that Renard can be repurposed to treat lithium bearing material.

This move is expected to bolster the development of Winsome’s Adina Lithium Project and potentially other lithium deposits in the region.

The acquisition includes an option for Winsome to take over the diamond mine’s processing facility and associated infrastructure or to acquire all issued capital in Stornoway.

During the option period, Winsome will assess the technical, economic, environmental and social feasibility of repurposing the Renard mine.

The Australian lithium company will not assume Stornoway’s financial debts other than mine rehabilitation.

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It can exercise its option to acquire Renard for C$52m ($38.5m) in cash, shares or a mix of both, following Quebec Court clearance and until 30 September 2024. There is also the provision to extend this timeline.

Winsome is also in the process of updating the Adina Mineral Resource estimate, which is projected to be 59 million tonnes at 1.12% lithium oxide (Li2O) and is on track for completion in the first half of 2024.

Concurrently, studies at the Adina site are progressing with an expected completion in the second half of 2024. These studies will evaluate operating scenarios both with and without the integration of the Renard mine.

The company is currently identifying the optimal transaction structure and negotiating definitive documents to finalise the proposed acquisition.

Winsome managing director Chris Evans said: “Should we exercise the option, the Renard project, processing plant and associated infrastructure has the potential to be transformative for Winsome’s shareholders.

“It would give us access to a fully permitted, recently operated processing facility that utilises similar steps as a spodumene concentrate dense media separation processing operation, and de-risk project development by materially reducing capital cost.”

“Furthermore, it is a regionally strategic asset with potential to provide a cost-efficient transport and logistics solution for Winsome’s 59 million tonne lithium mineral resource at Adina by opening up year-round road and rail access to the growing critical mineral and EV [electric vehicle] battery supply chain hub in nearby Bécancour, Québec.”