The new captain in North AmericaNovember 5, 2021
Sharing the Winsome story at RIU Resurgence ConferenceNovember 22, 2021
Managing Director Chris Evans answers a few questions ahead of the Winsome Resources’ expected listing.
With Winsome Resources on the path to listing on the ASX and so much demand for the commodity, it must be an exciting time to be working in the lithium space?
With equal measures of skill and luck, we’ve picked what is shaping up to be the best time imaginable to list on the ASX with a lithium focused exploration company.
Our IPO was hugely oversubscribed, demonstrating the high regard in which investors hold our assets in Quebec and the general appetite for lithium investment. This should bode well for us in the after-market once we start trading on the ASX.
We look forward to seeing our share price generate good gains based on the strong support we’ve witnessed, and the good news we expect to generate from exploration activities on our projects.
What is the expected timeline to listing and where are you in the process?
We have successfully completed the capital raising element of the listing process, with offers well in excess of the maximum intended amount of AUD$18M.
We are now demonstrating compliance with all listing requirements to the ASX and have been given an indicative listing date of 25 November by the ASX.
How does the Company intend to use the funds raised from the IPO?
We intend to spend the majority of the $18M on exploration and resource development activities across our three projects in the James Bay region of Quebec over the next two years.
At Cancet, the most developed of our three projects, there has already been over 5,000m of diamond drilling completed and we have seen some amazing grades of up to 3.7% lithium oxide (Li2O).
We’ll be expanding drilling in these known areas of mineralisation to develop a maiden resource, while simultaneously exploring for new areas of mineralisation on the remaining 350 odd claims at Cancet that have thus far been exposed to relatively little exploration.
The same will occur at Adina, where we’ve already completed about 1700m of diamond drilling, whereas at Sirmac we’ll be doing grass roots exploration to confirm the presence of lithium mineralised pegmatites that look like they extend onto our property from known adjacent lithium resources.
Being in such a mineral rich province as Quebec, it’s likely an opportunity to use some of our funds to acquire additional land and increase the Winsome prospective lithium claim portfolio will arise.
What is the intended path to production (i.e. roadmap to announce resource, develop assets)?
We are aiming to publish a maiden resource at Cancet and/or Adina within the next 18 months. This will be accompanied by a Scoping Study to demonstrate the economic viability of the project(s).
After this, we’ll progress to a Feasibility Study along with further drilling and resource development.
In approximately 3 years, with a positive Feasibility Study, we’ll seek the Capital to commence construction which will take approximately 18 months to complete.
Overall, in a standard scenario, we’ll be looking at between 4-5 years to get into production.
However, there are always ways to fast-track the process with the right partnerships and investment appetite.
We will of course be investigating all scenarios to bring our projects into production as quickly as possible given the global demand we now see and believe we will continue to witness.
Why did you choose to focus your attention on Quebec? It’s a well-established mining jurisdiction but what makes it so attractive?
Winsome is very lucky that MetalsTech Ltd have owned these tenements in Quebec for the past five or so years and decided to spin them out into a new Company earlier this year.
Quebec is at the forefront of the North American push to develop its own EV battery supply chain, with Lithium being one of the key base ingredients needed to make this happen.
The Fraser Institute regularly ranks Quebec in the top 10 list for investment attractiveness.
Read more here: annual-survey-of-mining-companies-2020-execsum.pdf (fraserinstitute.org).
The government of Quebec is also very supportive towards mining, with 40% of all our in-ground exploration expenditure being refunded by the Quebec Government in the form of tax benefits and credits.
The global appetite for lithium is insatiable. What exactly is fuelling this demand?
Demand is almost entirely being fuelled by governments and Original Equipment Manufacturers (OEM) around the world setting targets to increase the uptake of Electric Vehicles.
The majority of attending governments at the recent COP 26 UN Climate Change Conference this year have set targets for the uptake of EVs or the banning of traditional Internal Combustion Engines (ICEs) between 2030 – 2050.
In response to this, OEMs have set their own ambitious targets for the manufacture of EVs, with almost every major auto manufacturer having already announced plans to phase out, most if not all, of their ICE models by 2040.
They’ve spent billions of dollars in infrastructure to enable this, however, there’s simply not enough raw materials like lithium that will be battery ready in time to make every target possible.
Huge investment is needed to even produce a fraction of what is needed.
Pilbara Minerals recently sold the most expensive cargo of lithium spodumene ever – how high can it go?
The price of $2,350 for a spot price of cargo recently achieved by PLS shouldn’t be taken as the standard long term contractual price for all Spodumene concentrate although it is great news for the industry and a good indicator of the demand in the market.
But the price is certainly rising and seems to be sitting over $1,000/tonne now, compared to circa $400/tonne 12 months ago.
If the long-term price for 6% Li2O concentrate sits above $750/tonne, which everything seems to point to now, then there are a host of hard rock lithium projects that are profitable and will get into production.
The market needs this to happen, and our project, given its location, high grades and the coarse-grained nature of our spodumene crystals (indicating amenability to Dense Media Separation) means that it should be in same category, although we have a year or so of drilling and studies before we can prove this.
Australia is lagging in comparison to the rest of the world when it comes to electric vehicle uptake. Do you think this will change anytime soon? What needs to change (and does it matter to Winsome)?
Electric vehicles are a significant part of our future, and it is exciting to see Governments around the world taking the initiative to prioritise smarter, more sustainable modes of transport.
Hopefully, Australia will follow in the footsteps of Quebec which has a robust plan to move to Electric Vehicles, announcing last year they would ban combustion engines by 2035.
With their strong incentives and solid plan, it is no wonder lithium is a booming industry in the Canadian province – and we are delighted our three projects are located there.
Can you share a bit about your professional background and what led you to Winsome Resources?
I’m a Civil Engineer by background and spent the first 13 years of my career in the Australian Army as an Engineering Officer, where I managed construction projects for the army all over Australia and in other parts of the world
I finished up with the military in 2007 and moved into a Construction Management role in London for three years.
I returned to WA in 2010 and was lucky enough to get into mining, where I worked on the development of several iron ore mines. Then in 2015 I was given the opportunity to become Chief Operating Officer of Altura Mining and manage the Pilgangoora Lithium project here in WA.
This was at a time when the first Lithium boom was heating up, so it was a great opportunity to work on a lithium project – right from the Scoping Study stage through to Resource Development, detailed study phase, construction and then operation.
Following that, I became Managing Director for another ASX listed junior lithium company with assets in West Africa.
Now I feel extremely fortunate to be the MD of Winsome Resources because I believe there is no better commodity to be involved in than Lithium and the Company has fantastic assets in a great jurisdiction.
Lithium is going to be in heavy demand for the next decade at least and is at the forefront of transforming the world in the new low carbon paradigm essential to slowing down global warming and reducing harm to our planet.
There are other minerals that are regarded as critical for a whole range of applications, so why is lithium the one that everyone is focused on? Would it be fair to say the market buoyancy is underpinned by a growing awareness among investors of the commodity?
Lithium is just one of several elements essential for the manufacture of EV batteries using current technologies.
Perhaps the difference with Lithium is there are no alternate technologies at this point that allow a substitution or significant reduction, such as is the case with Cobalt. There are numerous EV battery chemistries in the world today, however all have Lithium at their core due to its lightweight nature and capacity for high energy density.
Although in total there is a lot of lithium in the world, finding economically extractable deposits is difficult and can be fraught with risks, so when a high quality relatively simple hard rock deposit in a good jurisdiction (such as ours) is found, investors are naturally attracted.
You managed to get in and out of the country to visit your assets in Canada, drum up some interest in New York and attend a global lithium conference in Las Vegas recently. Can you talk us through the highlights of that trip and the value you gained from being there in person?
It was great to reconnect again in person with investors, consultants, and regulatory authorities.
I think it’s easy to forget here in Australia that the rest of the world is largely continuing with business as usual and how important it is to maintain face-to-face meetings where possible.
It was an invaluable experience physically going and seeing our three project sites in Quebec.
Previously, I always felt at a disadvantage when trying to market the projects before seeing them myself and verifying their quality. After spending four days on the ground inspecting them, I’m more excited than ever to get going, continue our exploration and get our projects into development.
I made a lot of connections over the weeks I spent in Quebec, from potential staff to contractors who can help us develop the projects, to potential investors and government authorities. It was vital networking that helped enable us to hit the ground running as we list.
I also enjoyed meeting a lot of investors at the Fastmarkets’ Lithium Supply and Markets Conference in Las Vegas and telling them all about the Winsome Story.
The reception was extremely encouraging and reinforced what good assets we have and the strong appetite for investment in them, not only in Australia but internationally.